Are we in for a big dose of annual reporting mediocrity?

Recessions have a habit of putting extreme pressure on people. Take your typical IR professional. The company has taken a nose dive. Shares are worth considerably less than they were in 2008. Shareholders are not happy and there is a groundswell of activism. Membership of the Australian Shareholders Association rises in anticipation of a dog fight. The company’s executive remuneration policies suddenly look out of synch with these recessionary times, and don’t the shareholders know it. Strangely the ‘people at the top’ don’t quite share your views on the matter. Communications to shareholders remain infrequent and have failed to deliver the admissions, information, strategies and insight from the CEO’s mouth they so dearly need to hear. The more senior and vocal shareholders build up a head of steam and make the phone call, lambasting IR and executive teams and generally blowing a valve that leaves junior staff lost for words and ruing the day they entered the world of IR. The press are unrelenting in their criticism of your industry, company and CEO, revelling in the firestorm that has clouded the previous years’ stellar performance, now a distant memory. Calls to prominent jornalists become lost in the queue. No-one wishes to discuss the AGM with you despite it promising to be the company levelling event of the year, perhaps with a record number of shareholders in attendance demanding than a cup of coffee and a biscuit. Thoughts of sacrificial swords loom large. The phone rings on.  

Investor Relations professionals are presently under immense pressure to smoothe the waters, pacify shareholders and maintain their company on the investor radar.

The annual report which over recent years has kept a modest face will, in 2009 and probably 2010 also, be under more scrutiny than ever before and has a very hard job to perform.

So how will companies approach the annual report this year? The pessimists among us will bet their dollars on the ‘same as last year, don’t rock the boat, and for heaven’s sake don’t make it look as though we spent any money on it’ approach. The optimists, and I am confident that there are some of you out there, will seek expert opinion on how to realise ‘more for less’ based on the following:

> cost savings across the entire annual reporting process
> an intelligent presentation without the designer decoration, that is sympathetic to circumstances yet confident in its ability to tackle the future
> a comprehensive and convincing HTML online annual report (mini website) from which shareholders can access information easily and quickly
> a centrepiece Q&A video with the Chairman and CEO who answer specific questions in a frank and open manner on the company’s position, its ability to survive and succeed, and how it will achieve this
> a decision on how to present the report in hard copy form for those 10-20% of shareholders still requesting it – do we produce a colour annual report, a black & white one or a discreet Shareholder Review in an easily digested format?

Times change. Markets change. And so must the annual report. It has a hard job to perform this year and warrants advice from experts to not only provide new cost efficiencies but take it to a level that satisfies the information needs of concerned investors and reinforces confidence in the company’s ability to forge ahead when markets recover.

So are you a pessimist or an optimist? Your decision will most *certainly influence your shareholders’ decision making later this year. 

Tony Heywood is a Fellow of the Design Institute of Australia, founder of Heywood Innovation in Sydney Australia and joint founder of BrandSynergy in Singapore.

View some of Heywood’s work on www.heywood.com.au

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