‘Tis the season for…annual reports! Brandemix’s resident expert on the subject is Creative Director Clarissa Zorr, an award-winning designer with more than 10 years of experience. She’s also a member of AIGA, the professional association for design. Today, we turn the blog over to her to get her thoughts on how to create a compelling and honest annual report.
The Crazy Season
Every year, publicly traded companies are required by law to present their shareholders with a report on corporate performance. The exact date varies from state to state, but it’s always around tax time. Companies often start creating the report during the fourth quarter. The final financial statistics don’t come until close to the end, and you can’t really design the charts or graphs until they do, making November through April the “crazy season” for people like me.
Starting Off Right
Like any project, I start by listening to the client so I can develop the message they want to convey to investors. Sometimes I read transcripts from the annual shareholders meeting, where I look for emerging themes in the company president’s address.
The format of an annual report can go in any direction. Some companies talk about their pipeline and look to the future after a bad year. Some brag about their recent accomplishments. The interior of the “book” will vary depending on the story the company wants to tell.
What Makes a Great Annual Report
What makes an annual report successful is transparency. All companies have bad years. How do you keep your investors during the tough times? People often want to get rid of bad stock. But a financially sound company will have a plan for a bad year if, say, a drug didn’t get approved or a merger didn’t work out. The shareholders deserve honesty and it’s the agency’s job to convey that. Of course, there are ways of being transparent while still giving the story a theme or framing information in a certain way. The company wants investors to know that though it was a tough year, but the company still has a long-term plan for success.
Whatever the report’s concept is, we’re going to tell it with design. That includes photography, illustration, typography, and charts. These all must come together to tell that story clearly. It used to be that all annual reports were physical books, but within the last 10 years, some states have allowed online versions. Interacting with screens instead of paper certainly affects the design and the reader experience as well as the cost. For companies that preach sustainability, not printing hundreds of thousands of books is essential.
|An annual report chart created by Brandemix|
New Trends in Annual Report Design
As long as the investors have access to mandatory 10-K tax documents, the report can take any form. I’ve had clients whose annual report was little more than a video; they told their whole story on a website with almost no text.
An even more intriguing idea is the use of social media as a way to communicate with investors and share financial information. That concept is a little too advanced for some investors (and even some companies), but it’s definitely a trend. And I understand why: it’s transparent. It’s the same sort of open dialogue that companies use when talking to consumers or job-seekers on social media. The message to investors may be different than the one given to customers, but it’s still truthful.
How Brandemix Can Help
We partner with top international firms that specialize in investor relations. They handle all the regulations, which lets us focus on strategy, design, and execution.
And there can be a lot of execution. Taking the video route, for example, requires shooting, editing, graphics, and music. Often the board members must sit for an annual photograph, which can be logistically challenging for such busy individuals. The sheer amount of writing that must be done can also be daunting. This is why some companies turn to agencies like Brandemix.
The Best Annual Reports
There are actually awards for the best annual reports! IR Global Rankings determines the best reports based on “extensive technical proprietary research of publicly traded companies through a clear and transparent methodology.” IRGR looks at annual reports from a technical perspective. They ask, Are you being transparent? Are you being forthcoming? Are you giving investors the information they really need? It’s all about the quality of communications.
I was on the team that IRGR honored as one of the top global annual reports in 2010.