Welcome to the Likemind Debate, a monthly email dialogue brought to you by Likemind. Always keen to promote new thinking and encourage debate, Likemind asks: is the online written report already more useful than the printed version ever was?

Arguing in favour of online reports is John Godfrey, group communications director at Legal & General. Sticking up for printed annual reports is Bob Wheller who heads up the annual report offering at creative communications agency The Team.

Dear Bob,
Why do companies still chainsaw the forest every year to produce reams of printed statutory disclosures that hardly anybody reads? Why expect shareholders to pay to print and mail heavy documents when most only want selected highlights: top line results, dividend information and directors’ remuneration?

The answer can’t be greater transparency, or even better communication. Almost everyone is online nowadays, and we have a wider range of technologies to reach shareholders. Audio and video can enable them to look the chairman in the eye and hear the company’s story told directly. Users can crossreference, produce data in charts and graphs in their preferred style, and make notes on screen. Readers can personalise a package of those bits of the report that interest them. It can be more user-friendly for disabled readers. And yes, people can always print it out if they want.

You can cover more ground in an online report. Links can take the reader straight to other pieces of supporting evidence about a company. One day there might be feedback opportunities, a chance for online discussion in a way which a paper dump just doesn’t allow.

Of course it’s still a legal document, it has to be verified, audited and a copy has to be filed. And a minority of shareholders will probably always prefer paper. We’re not talking about  reporting by Twitter, or dumbing down here - just using a modern medium. A vellum manuscript illustrated by monks is a beautiful thing, but a paperback is better. Adapt to new technology and move on!
Best Wishes,
John

Hi John,
Thanks for your email. Most of the points you make, I have been hearing for over a decade. As revolutions go, the online reporting one has been a slow one. This tells us that there is something holding back the changes that everyone has been predicting for so long.

All of the environmental ills that online reporting solve are great and I support them as much as anyone. The ease of use and convenience that online tools give the report is not in question and can only improve with time. But why hasn’t the change happened as quickly as everyone predicted?

I suspect that shareholders like having a real printed object in their hands, much like people still enjoy reading a newspaper or book. The printed report is tangible evidence of a shareholder’s investment in a company and, given that shareholders no longer receive share certificates, it gives added importance o the book. It is also evidence of the company’s investment in its shareholders by the very fact that the company has gone to the effort to produce, print and post the report to that shareholder, instead of merely uploading a pdf of the report to their website.

For example, e-christmas cards can be more exciting than printed cards and they save trees, but I still muchprefer a handwritten, printed one.

It is true that the change has come and may move more quickly with recent changes in legislation, but the printed report is still here and will remain here for some time.
Bob

“Why do companies still chainsaw the forest every year to produce reams of printed statutory disclosures that hardly anybody reads? Why pay to print and mail heavy documents hen most only want selected highlights”

Hi Bob,
You’re right that the development of online reporting has been a slow burn process, but I think the Companies Act has galvanised us all over the last couple of years.

I think we are in a transitional phase. What seems to have happened so far is that a minority of shareholders still value full print versions (mainly institutions who like to have the full works on the desk for reference), while many retail shareholders, including for example employees, seem to prefer, or at least be content with, online communication. The interesting group sits in the middle: small shareholders who still want a print document, but probably don’t use very much of it. For them, the printed short-form Summary Financial Statement can be the answer.

So I think what we are moving towards is not the extinction of print reporting, but rather the tailoring of reports to audiences - with the majority likely to move to online.
Best Wishes,
John

Hi John,
It is timely that the amount of information going into the annual report is increasing, just at the point when the online report begins to be more widely used. As annual reports have increased in length year on year, they have become less effective as a vehicle to communicate a company’s strategy and brand, and have also become less inviting to the average shareholder. This problem may be alleviated by the web.

By relegating much of the backend of the report online, a printed summary can now be led by the more important parts of the report, such as the review of the year, strategy and future outlook. With greater emphasis on these elements, the design will be more informative and visually exciting. As the reports become shorter and more focused on message, it will allow the designer to be more focused and creative on getting that message across.

Print runs will also become shorter as fewer shareholders opt to receive a printed copy of the report. This will make it possible for designers to employ a larger variety of printing techniques for more impact, such as embossing or the use of special papers. It is ironic that the move from print to online might give the opportunity for the printed report to be more effective.

Moving the bulk of an annual report’s content online, where it can be used and accessed more easily, is perhaps inevitable, but it will also allow the printed report to be more focused and special.
All the best, Bob

“As revolutions go, the online reporting one has been a slow one. This tells us that there is something holding back the changes that everyone has been predicting for so long”

Hi Bob,
I think I agree with the thrust of your argument here - that use of different media for reporting allows shareholders to pick and choose how much information they want, and in what form. Provided of course there is a full legal copy available for filing and for those shareholders who want it.

Our experience over the last couple of years bears this out. The print run for full versions has been dramatically cut back as shareholders opt for short-form or go online, generating a six-figure cost saving. The corollary has been that we have been able to improve the actual content and presentation of the material in the various reports we produce. So the vidence is that online could potentially help make printed reports more impactful, as you suggest.

But I think we need to be slightly careful about allowing short-form reports to mutate into pure marketing material - losing objectivity about items like principal risks and uncertainties, key performance objectives and so forth. The Companies Act is not very prescriptive about the content of the Summary Financial Statement, so it is important for auditors to make ensure that the document, however short, is a true and fair reflection of the Company’s activity and performance.

That said, I suspect we will now see a period when there is scope for both print and online reporting - with the premum on excellence in both media, and opportunities for creative practitioners in print and on screen. And hopefully the real win will come in terms of better informed, more engaged shareholders.
All the best,
John

Hi John,
I agree that anything published in place of the annual report should have the same credibility of an audited report. The reason I see the report as a marketing tool is that, for many of my clients, the report is their principle tool for corporate marketing and therefore needs to really spell out the company’s business and strategy, etc.

We are at a very interesting turning point with all of this and the debate might not be limited to just print or web, but, as you mentioned in your initial email, other means of communication can and will be considered in future. In order to communicate to shareholders in the most effective way, we must consider all options. There is still a very strong case for both print and online, for the reasons we have already outlined, but I wonder what other media we might be considering in the next few years. One thing is certain, given the choice of one or more options, the shareholders are likely to choose more.

The other benefit that you mention is the cost savings made by clients in all of this. As a designer, it is nice to think that some of the budget spent on print and paper might be invested into the thinking behind what the company wants to say and how they deliver their message. The communication task will remain the same, but the delivery is likely to be different and varied. As you say the real winner will be a more informed shareholder.
Thank you for this – it has been fun.
All the best,
Bob