In May 2015 the Financial Reporting Council issued a Lab report which outlines investors’ views on digital communication. Although it concludes that investors prefer a PDF for an online annual report, they do believe that the medium of digital should be better used for wider investor communications, maximising the output through other channels including; video, social media and delivering the annual results presentations.
The recently published 2017 Lab report builds on the 2015 findings and seeks to identify the mediums and technologies that can make the most of the digital opportunity for investors.
“Technology has the power to significantly change the way that companies communicate with investors and other stakeholders, improving both the usability and timeliness of what is reported and providing new opportunities to engage.”
But in a corporate sense, technology is not reaching its full potential.
The FRC believe the future of digital reporting will be successful providing it is able to satisfy the following criteria. It must be free and easy to understand, timely and accessible, credible, usable, contextual and engaging, compatible, cost-efficient, prompt and compliant.
Wrong. There is a balance to be struck between providing investors with the material that they want in a format that they want to receive it, whilst regularly communicating to the wider business world through immediate channels.
The annual report is no longer just for investors, and as such digital reporting should reflect this, it should consider how digital technologies can be optimised for all stakeholder audiences that are interested in the annual report (and other) content.
In our opinion the success of a digital annual report (in any format) depends on how well the business story is executed and optimised for digital. As video content is the most effective digital communication medium and easily consumed across multiple channels, this should be the primary tool used. Consideration toward developing other interactive content, should be lead by the complexity of the information being relayed, as well as how else this information might be used. Business models, operations maps, distribution chains or strategic roadmaps are obvious candidates for interactive content, as they will not only be used on the website, but also distributed across other channels and investor presentations.
Here are some examples:
Vodafone – using video in the online annual report
Eurochem – distributing annual report content through social media