Corporate annual reports: More than just an obligation

Annual reports are a vital component of your company’s communication strategy. They can help you gain more trust in your brand and showcase your company’s biggest achievements and future projects. While annual reports are mandatory only for some companies, it’s good to consider creating such a document, even if you don’t have to. They can play a big role in your company’s PR and branding. Let’s talk a bit more about that.

In short, an annual report is a comprehensive document that companies (mostly public corporations) must provide to their shareholders every year. It describes the company’s operations and financial condition, as well as future plans and projects.

In the past, annual reports were printed and distributed to every interested party; nowadays, digital reports are becoming increasingly popular, mostly due to environmental reasons (if you still want to print your annual report, it’s a good idea to consider printing it on recycled paper).

ABB annual report

Why is this report worth looking at? We made sure that it stands out and catches the attention of anyone who’s reading it. First, we used an exclusive font that was custom-designed for ABB and formatted into a one—or two-column page layout. Moreover, the report incorporates a multitude of infographics and intricate tables presenting detailed financial data. Yet, our approach goes beyond these elements, infusing premium quality through high-grade paper and meticulous graphic design.

Why is this report worth looking at? We made sure that it stands out and catches the attention of anyone who’s reading it. First off, we used an exclusive font that was custom-designed for ABB and formatted into a one- or two-column page layout. Moreover, the report incorporates a multitude of infographics and intricate tables presenting detailed financial data. Yet, our approach goes beyond these elements, infusing premium quality through high-grade paper and meticulous graphic design.

Why are annual reports important?

There are at least four reasons why your company should release such a document every year. First off, we have legal requirements. All public traded companies need to release an annual report as a legal obligation. In this case, such reports are used to show compliance with regulatory standards, thus helping those companies maintain good standing in the market. According to Investopedia[1], annual reporting became a regulatory obligation shortly after the famous market crash of 1929.

But that’s not the only reason why you should consider creating such reports for your company (even if it’s not publicly funded):

• Transparency and accountability: Annual reports provide an excellent overview of the company’s financial condition, strategic initiatives (both current and future ones), and growth plans. They also show your company’s transparency and commitment to achieving its goals. By showcasing this commitment to openness, you confirm you are accountable to your shareholders, employees, and the public.
• Attracting more investors: Annual reports can help you attract more investors to your business as they rely on annual reports to assess the potential of a company. A well-designed, meticulous report that highlights financial stability, growth prospects, and strategic directions for your company can help you win the interest of many future investors!
• Internal use: Lastly, annual reports are useful for internal purposes. They serve as a benchmark for performance for all the company’s stakeholders. Moreover, they allow both employees and management to understand the company’s situation and plans for the future.

That said, we encourage even companies that are not obligated to release such reports to do so.

What should be in an annual report?

Financial reports usually start with general operational and financial highlights so that readers can quickly get the gist of the report. A good practice is also to include a letter from the company’s CEO to the stakeholders, highlighting the most important aspects of the company’s operations and future outlook. Some companies include a separate “about” section that explains each part of the report as well as the most important milestones for the past year.

The annual report should include more detailed financial statements (balance sheets, income statements, equity statements, etc.) in the next chapters as well as MD&A. This acronym stands for Management Discussion and Analysis, and, in short, it’s an analysis of the company’s performance supplemented with qualitative and quantitative measures. MD&A is useful primarily because it provides a broader context to the data and numbers presented in the report.

Other elements that should be included in your report are as follows:

• Corporate governance: Here, we talk mostly about the information on corporate governance standards, policies and practices that are used to provide a comprehensive overview of the company’s business model and its structure[2].
• Sustainability and CSR initiatives: It’s a good practice to include details about your company’s environmental and CSR initiatives. This reflects the company’s commitment to sustainable practices and builds trust in your business. Some companies even go one step further and prepare separate ESG reports. You can read more about them in the linked article on our blog.
• Auditor’s Report: The last element you ought to consider is an independent evaluation of a company’s financial statements prepared by an external auditor. This part is essential as it adds credibility and reliability to the financial information presented by the company. Sometimes, companies also add their accounting policies to their reports in order to showcase the rules and practices they apply when preparing financial statements.

What to do with an annual report?

Once your report is done, you should distribute it to all interested parties. This way, you can fulfil your legal obligations but also get some publicity in the media. As we mentioned before, nowadays, the emphasis should be on distributing annual reports electronically. Digital reports are far more eco-friendly compared to their printed counterparts. This way, you can reduce the need for paper and lower the company’s carbon footprint. Digital reports are also more accessible and shareable, which is another added value.

So, how and where should you distribute your reports?

• Website: We encourage you to host the digital version of the annual report on your website and distribute it via email to all stakeholders. This will ensure easy and direct access to the report.
• Social media: While social media may not be the best place for the whole report, nothing stands in the way of sharing highlights of the report on social media platforms, especially in a visual form (screenshots, infographics, etc.). Such an approach can also increase visibility and engagement among your target audience.
• Stakeholders: You need to ensure that all key stakeholders, especially shareholders, receive the report. For the most important parties, a printed version should be available, as it’s more meaningful and helps you build strong relationships with them.
• Media and business organisations: Lastly, you should consider sending the annual report to media outlets (along with a press release) and business organisations that your company is a part of. This helps get publicity and amplifies the company’s achievements, thus building a positive reputation for your brand.

The role of a branding agency

A branding agency plays a big role in designing annual reports. While such an agency won’t be able to help you with gathering all the financial and operational data, it can take full care of your report’s visual side. This is important as a visually appealing and well-structured report can significantly enhance readability and engagement. What’s also important is that good design helps present complex data in an accessible and attractive manner, making it easier to read and digest, especially for less financially savvy people.

What’s also important is that a branding agency such as Admind ensures that the report aligns with the company’s brand identity and reflects the company’s values and vision, thus maintaining consistency across all corporate materials and assets. When discussing the textual layer of your report, we can help you craft attractive content that resonates with stakeholders and highlights your company’s achievements and future plans.

Good examples of annual reports

Before we wrap this article up, we want to show you three amazing examples of nicely-designed annual reports. The Nissin Foods example especially shows that annual reports don’t need to be boring and generic!

Nissin Foods

This report was conceived and made as a manga comic. It has compelling woodcut-like illustrations that even feature the company’s management. The report was mostly done in monochrome work and got a fitting paper.