Why are annual reports often restricted only to shareholders? Namrita Sachdev reports 

The annual report is said to have evolved into an invaluable communications tool that caters for all stakeholder groups. Money is lavished on making a document with the right mix of accessibility and gravitas, numbers and narrative, forward-facing strategy and considered review, brand values and profit & loss. And all to maximise its value and utility as a stakeholder relations tool. Yet, it seems that many companies continue to confine its use to investor relations. Why?

Research carried out by Communicate reveals that companies fail to use their annual reports to reach different audiences. In addition, they are not providing clear and easy access to annual reports. The research, carried out on FTSE 100 companies, reveals that although the majority of companies provide access to online reports, accessing hard copies proves more difficult. Nearly a quarter (23%), including Admiral Group, Burberry Group and Diageo, ignored requests for reports even though nearly half of these requests were through a dedicated ordering service. More surpising was the fact that 12%, including British Airways, J Sainsbury and Marks & Spencer, said that they only send hard copies to shareholders.

Of the 64% of reports received 19% of companies delivered a speedy next day service. Significantly, half of the companies failed to provide a dedicated ordering service, leaving the interested party with the job of investigating a contact.

At last month’s Investor Relations Society conference, IROs were urged to engage more via all communication channels, even using social media tools such as Facebook and Twitter. Good news for investors but Communicate’s research suggests that some companies won’t allow their other audiences access to their most comprehensive piece of communication – the annual report.

So why are companies restricting access to the printed annual report? For environmental reasons? To cut spending? Or something else entirely? Sallie Pilot, director of research & strategy at Black Sun cites a move to online reporting as a factor in struggling to get hold of the printed report. “Print runs for annual reports have dropped dramatically since 2007 as companies have looked to take advantage of potential savings afforded to them by the electronic communications provisions of the Companies Act 2006,” she says. “Many stakeholders are also taking advantage of the additional functionality provided by online reports and, to a lesser extent, the humble PDF. We anticipate this move to online reporting will continue over the coming years as a new generation of investors, who have grown up with digital technology, become the primary consumers of corporate information.”

Pilot sees integrating the online report with the corporate website as a major challenge for companies. “The challenge which remains for companies, is how to ensure that what they offer online in terms of their annual report is of value to the end user and, rather than sitting in a silo, that it integrates with the rest of the corporate website to form part of the overall reporting programme.”

Although members of the Public Relations Consultants Association are charged with engaging non-investor audiences, its communications director Richard Ellis is sanguine about limiting access to the report, especially in the current climate. “At a time when budgets are tight, resources are stretched and companies are under pressure to minimise their environmental impact it makes sense to minimise print runs,” he says. “Companies should just be clear how stakeholders should access them.”