Online annual reporting trends
Recent research conducted by Ince into both local and international annual reporting trends indicates that the online report looks set to become the default reporting format in the near future. Increasingly more effort and resources are being redirected to the online medium whilst the print report is being simultaneously stripped back in both narrative and design elements. Current trends indicate that the most likely scenario in the near future is a summary print version supported by a full online version with a print-on-demand facility.
Legislative amendments aimed at advancing electronic shareholder communications remain the key driver of online reporting. Examples include: the “Notice and Access” rule in the USA which requires issuers to post proxy materials, including the annual report, on a publicly accessible website; the amended Companies Act, 2006, in the UK which provide public companies with the option of moving their default reporting format to online; and the more recently amended Companies Act, 2008, in SA which now makes provision for electronic publication of shareholder materials.
These amendments are aimed primarily at: Reducing the cost burden for public companies, maximising shareholder access to corporate information and minimising the ecological impact of large-volume printing. Beyond that, the online report within a well-designed corporate website is fast becoming the first face of the organisation for both customers and potential investors alike. As such, the inherent value of these as both marketing and investment collateral with a global reach cannot be underestimated.
Once the decision has been made to produce an online version of the report, the next obvious question is what online reporting format to use. Our research has examined over 450 online reports both locally and internationally, and within this universe has identified four categories of online reports predominantly in use: (i) a basic PDF conversion of the printed report; (ii) an interactive flipbook conversion of the report, (iii) a hybrid version where only certain sections of the report have been converted into HTML and the rest are available as PDF downloads; and (iv) the full HTML report where the entire report has been converted into HTML.
Our research has shown that of the JSE-listed companies that did publish some form of online annual report for the 2010/11 financial reporting period, the majority of these reports were PDF conversions of the print publications. Generally, the mid to large caps have been the early adopters of the full HTML report which is intuitive in light of the additional cost considerations of HTML reports. Just a handful of these HTML reports offered advanced features such as interactive charting, embedded video content, note savers and personalised report compilers. The remaining online JSE reports were split between the interactive flipbook and the hybrid HTML.
Research conducted internationally shows a profound shift away from the static PDF to the interactive HTML report. Nexxar, an Austrian-based design agency, surveyed the 2011 online reports of 505 companies on major exchanges and indices such as the Dow Jones in the US, the FTSE 100 in the UK and the CAC 40 in France. They found that the share of HTML reports increased from 40.5% in 2010 to 44.1% in 2011, firmly establishing HTML as the preferred online reporting format within their sample. Only 38% of the companies surveyed still produced the PDF version only of their annual report. These findings were echoed by that of Radley Yeldar, a UK-based creative communications agency. Their latest 2011 survey into the corporate reporting trends of FTSE companies showed that 44% of all FTSE companies and 70% of FTSE 100 companies report in HTML format.
Clearly, HTML is fast being adopted as the preferred choice for online reporting and justifiably so. The interactive, utility value of the HTML report such as personalised downloads, Excel financials, searchable notes, interactive charting, bookmarking and embedded rich media opportunities, is what provides the real added value for the intended audience over the print version of the report. Whilst the lower costs and quicker turnaround times associated with the PDF report are duly acknowledged, the PDF cannot truthfully be called an online report; all it is really is a printed document that has not yet been printed. Much the same can said for the flipbook report. The rapid adoption of the hybrid HTML report is largely due to the cost reduction that can be achieved by converting only selected parts of the report to HTML and keeping the rest in PDF format. Ideally, the hybrid report should be the first step towards a proper full HTML report.
With the opportunity provided by the web to transform a static print document into an interactive and engaging online experience, the trend towards more HTML reporting will continue. Customers and shareholders alike will soon become much more discerning, and demand customised and feature-rich reports with high degrees of online utility, sophistication and differentiation that can really only be accomplished within the HTML report. At Ince, we have a long and successful history of designing and producing both print and online annual reports. This gives us the advantage of being able to design the online report in tandem with the print report so that designers and programmers are on the “same page” from the outset which means a smoother transition from print to online. It is really this integrated nature of Ince that sets us apart in annual reporting space by allowing us to offer the client an all-encompassing solution that is designed, managed and produced centrally and in tandem across different platforms.