Dear Ian, 

Recent statistics have shown than 60% of adults in the UK access the internet every day, something I feel is truly representative of the importance of interactivity to people. 

Digital annual reports can be made far more engaging if they are hosted online on websites for example, with a degree of interactivity or live content which engages the reader. 

Hyperlinks and animated diagrams can be inserted, which can bring the information to life and really demonstrate the content to stakeholders and customers. 

Not only is a digital format more engaging, it is also easier to format and much cheaper than paper copies, for organisations looking to make savings in already stretched budgets. 

The production, distribution and storage of traditional annual reports, some of which are hundreds of pages long, is a costly business, not to mention having a much larger carbon footprint than digital content. 

In an age when all organisations are looking at how they can reduce the carbon footprint of their operations to demonstrate corporate social responsibility, a traditional paper annual report is very counterproductive. 

Regards, 

Heather 

 

Hi Heather, 

ACCA is committed to sustainability - we have led the way in the cause of environmental reporting in the accountancy profession since 1990, long before it became fashionable. 

So we would never support needless use of paper. But the days of companies routinely printing and sending out hefty annual reports to all their investors are numbered. More typically now, shareholders will receive notification that the report is available online, with the right to ask for a full printed set. Many of them will not bother with the hard copy. 

But we do believe the option should be there. The annual report is a key part of the transparency and governance arrangements of companies and if some active shareholders prefer to cross-reference facts and figures to ensure consistency via a printed copy rather than on-screen, that seems to us a reasonable request. 

The Financial Reporting Council has floated the idea of giving companies the option of getting rid of the printed version, and if the overwhelming response from stakeholders is to support this, then  

ACCA would not go to the barricades over it. But we would want to see this proof before making such a change. Governance is important and any major reform should be evidence-based. 

Regards, 

Ian 

 

Ian, 

I agree that any major reform should be evidence-based and that giving companies the option to get rid of the printed annual report is a step in the right direction. 

Hosting reports online as interactive documents also provides the added benefit of providing a means for collecting data. 

If users are required to log in or provide information about themselves prior to or whilst accessing the information contained in reports, it is possible for companies to monitor which stakeholders are interested in which aspects of the report, and may even be possible for them to insert opinion-based questions for users to complete. 

This in turn can provide invaluable CRM data which can be used by the company to its advantage. 

Printed reports are rightly perceived as costly both financially and environmentally, and we would suggest that perhaps by providing stakeholders with the option to print their own PDF reports, businesses may find that even fewer opt for the printed option. 

In response to your point about cross referencing facts and figures, the advent of the tablet device has revolutionised the way people access and look at data, and makes cross-referencing information documents just as easy as with hard copies. Tablets allow for reports to be compared, read and passed around meetings in just the same way as hard copy reports, but are more practical in the sense that hundreds of reports can be stored on one device. This is particularly handy in an age when so many are looking to downsize the amount of paper clutter in their offices and become ‘paperless’. 

Kind regards, 

Heather 

 

“In an age when all organisations are looking at how they can reduce the carbon footprint of their operations to demonstrate corporate social responsibility, a traditional paper annual report is very counterproductive”

 

Dear Heather, 

Purely in terms of technology, tablet devices are attractive and well designed but they are still costly. Most do not support Adobe Flash player, thus disabling the choice of viewing any ‘filmed’ announcements of the results - other than on You Tube. Option and choice is still important. For instance, with the Government’s Budget documentation, it is available online and in print - there is clearly a need for both formats. 

We have to accept it’s a paper and online dual world at the moment. Otherwise newspapers would not be printed - while it’s possible they may not be in five years time, the success of freesheets like Metro for tube users suggest they will still be around. 

But the wider point is whether a ‘static’ report, one which gives full snapshot details of how a company is doing at a point in time, has value or not. We believe it does. It allows a full external audit of those financial statements and for the company both to explain itself in terms of what has happened and where it sees itself going in the years ahead. It is a crucial part of the governance of the company, allowing the directors to be 

held to full account. While the ACCA is active in examining ‘real-time reporting’ and continuous auditing - as anything which potentially adds value should be researched - there will still be a place for the annual report. 

Yours, 

Ian 

 

Ian, 

Tablet devices, like smart phones, are a commonplace part of modern life and are becoming more accessible by the day as competition and proliferation drives the price down. Smart phones are available free of charge with most mobile phone contracts and also allow users to access interactive content quickly and conveniently ‘on the go’. In response to your comment that tablets don’t support Adobe Flash Player, I would argue that Apple devices are the only devices that don’t and it is perfectly possible to link to any video content to YouTube for Apple users. 

I acknowledge that there may be a need for access to paper reports as some people will always prefer to access their information in this way. However, I would like to cite the example of daily news as a case in point where many people now prefer to consume their daily news via an app or website rather than a newspaper. For example, the free Metro news app is hugely popular, as are pay-walled sites such as the Times. People find these free or cheaper platforms easier to access, and as they are updated frequently, they feel that they are more current than a daily printed newspaper. 

I would argue that by failing to make annual reports interactive and therefore more engaging using one of the many interactive channels available, companies may be making themselves appear behind the times and alienated from their stakeholders. 

Online reports can also contain static elements, such as for example the financial figures, which can be displayed in a document such as a PDF, that’s updated as and when it’s required as part of a wider interactive document. 

To conclude, an online or electronic annual report is low cost, attractive, interactive and engaging for the reader and can be easily updated. The most important thing is sharing your company’s information, mission, work, and financials, not the medium in which you do it, so I would argue that in today’s climate of easy accessibility and technical advancement, an electronic format is the only valid format for a good annual report. 

Best wishes, 

Heather 

“The wider point is whether a ‘static’ report, one which gives full snapshot details of how a company is doing at a point in time has value or not. We believe it does. While the ACCA is active in examining ‘real-time reporting’ and continuous auditing, there will still be a place for the annual report.”

Dear Heather, 

I would agree that the cost of tablet devices will come down – this has happened on every technological development over the past 30 years, although usually another model or device swiftly comes out which then in turn becomes the ‘must-have’. Of course as many of today’s older annual report users are gradually usurped by younger, more IT-literate individuals, so the move away from printed reports will gather pace. As previously mentioned, companies are already increasingly moving to on-line distribution of reports as standard, with the option to request hard copies. As a Tube user who often has to tread through discarded copies of Metro it would probably be good if you were right and everyone used the relevant app but I think it might be a while away yet.