The traditional annual report may be at risk from growth in on-line communication as large corporations become increasingly global, according to findings published by design and communications consultancy Merchant. This is despite the fact that Britain’s top public company websites are failing to communicate effectively with shareholders, the research says.
Report contributor Anthony Carey, director for the Centre of Business Performance at the Institute of Chartered Accountants in England and Wales, says companies are seizing the opportunity to offer shareholders more information, at a faster rate.
“The annual report is heading webwards, going global, and growing as it goes,” he says.
Carey maintains that company websites should be used for continuous dialogue with shareholders to give the business “a better public-domain platform from which to present a balanced view of your performance”.
But Robert Blank, deputy director, Institute of Chartered Secretaries and Administrators’ policy unit, says printed annual reports will not disappear. He says many companies have not invested enough to bring their on-line systems up to date. “Many private shareholders don’t have Web access. If reports aren’t published, it could mean they fail to see any information at all,” he adds.
The big shift towards on-line reports will probably happen in around five years, predicts Simon Shaw, creative director at CGI, which produces annual reports for ICI, Prudential and Sainsbury’s. But he says the physicality of a printed report will ensure it does not die out completely.
Simon Bamber, Bamber Forsyth director, agrees private shareholders prefer to read annual reports at home and not on-screen at work.
In the interim, Shaw predicts a growth in “short forms” – edited versions of annual reports, around 20 to 30 pages long.