It’s easy to assume that annual reports are dry, boring documents. With prescribed content, much of it relating to financial performance or regulatory compliance, you could think that there’s little room for originality or – dare we say – even creativity.
But as with any literature or content your company publishes, your annual report says a lot about the type of business you are. And not just in terms of your success or your future plans.
While some of its content may be dictated by regulations, your annual report isn’t just a document produced to satisfy regulators. The look and feel of your annual report is shorthand for your organisation’s culture and ethos. In a sense, it’s also your shopfront; one of the most visible manifestations of your brand for your shareholders, investors and other stakeholders.
The good news is that there are ways to make your annual report less dry and more compelling – here we explore four of them.
Which organisations need to produce an annual report?
The requirement for annual reports came about as a result of increased legislation following the stock market crash of 1929. Today, any limited company in the UK must produce an annual report at the end of its financial year, detailing the company’s performance over the previous year.
In the UK, The Companies Act 2006 requires directors to ensure that they give ‘a true and fair view’ in their annual accounts. Different types of company, by size and sector, have different regulations and requirements when it comes to the annual report; the ICAEW has a good summary of this on its website.
What should an annual report contain?
First, it’s worth looking at what your annual report has to contain. Because there are some non-negotiable elements that have to be present in all annual reports, including your operating and financial performance.
A typical annual report might include:
- An introductory letter to the shareholders from the CEO
- Operating and financial highlights
- Management discussion and analysis of the figures included in the report
- Financial statements, including cash flow statement and balance sheet, with notes to provide context
- The auditor’s report
Some companies may also include things like their mission statement and values, details of their directors and other leadership teams, and information about their key strategic projects or focus for the coming year.
The requirements around annual reports evolve over time, as new regulations and norms are adopted. The Financial Conduct Authority (FCA), for instance, now requires some of the firms it regulates to include information on their climate-related performance, in keeping with recommendations by the Task Force for Climate-related Disclosures.
Although much of this information might appear dry and prescribed, there are a variety of ways to present it, to make your annual report more interesting and relevant to those reading it.
How to make your annual report stand out
The secret lies in finding ways to present the information you need to include in your annual report in a way that makes it engaging. Here are our top four tips:
- Tell an interesting story. Because that’s what your annual report is, in essence; it’s the story of your company’s year, and your plans for the future. It’s designed to provide your business with the opportunity to reflect on performance over the last 12 months and set out insights into where you aim to be in the financial year ahead. Engage a professional copywriter, make sure it’s a cohesive story rather than a set of dry, disparate facts and your report will be instantly more readable.
- But don’t forget the basics – there are certain things your annual report needs to include, as in our list above. Much of an annual report’s content is dictated by regulations and convention – make sure you don’t miss any of these out in your quest for a more user-friendly report.
- Make it more than just words. Just because you have to include specific information, it doesn’t dictate the way that information is presented. Make it compelling! Infographics and images can convey your messages as well – if not better – than lots of words.
- Employ stand-out design. As with using a copywriter to wordsmith your report, the difference you can make by working with a professional designer can be amazing.
A professional design team – one experienced in working on annual reports, with their peculiarities and specific requirements – can turn a dry set of figures into a compelling walk through your company’s past year and future plans.
Your annual report should reflect your brand, where impeccable design underpins your messaging, clearly conveying your values and ethos.
Take the next step towards stand-out annual reports
It’s clear, then, that while annual report content may be prescribed to a certain extent, and may at first sight seem rather uninspiring, you can take steps to make your reports more compelling. A storytelling writing style, help from professional writers and designers, and the use of infographics and visuals can all turn a document produced to tick a compliance box into an engaging and valuable piece of literature for your shareholders and stakeholders.
If this has inspired you to revisit your reporting, and up your annual report game, you can find out more about Perivan’s annual report design specialists on our website.
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