George Yannakoudakis, investor communications and reporting associate at Brunswick Group, considers how UK companies can transform annual reports into strategic engagement tools.

Since the FRC set the foundation for best practice in their Guidance on the Strategic Report, combined with a strong regulatory environment, the quality of annual reports has improved significantly over the last decade.  However, in the UK’s increasingly competitive capital markets, more than ever before, there is a need for companies to stand out and communicate effectively with stakeholders. 

While best good practice has a rightful place in helping reporters attain a certain level of disclosure, there is an argument to be made around how it also has the potential to stifle innovation. There is an opportunity for companies to apply creative approaches to key sections that bolster their reporting and storytelling, allowing them to go from best practice to best-in-class. 

Optimising user-experience for key audiences

In line with the growing trend of annual reports becoming engagement tools for multiple stakeholders, establishing a clear user journey for key audiences at the start of the report is critical to achieving this objective. increases accessibility and engagement. 

The first few spreads of any annual report are prime real estate for landing key messages and connecting with readers. Creating intuitive user experiences within those pages targeted at stakeholders such as customers, colleagues and communities defines how they navigate and engage with content going forward. The “At a glance” has the potential to enable this by carving out sections that meet individual stakeholders’ expectations. In doing so, this could improve the accessibility of the document as well as its effectiveness. 

Building an authentic and unique equity story

That said, we cannot ignore the fact that the annual report remains a key investor communication document and, investment cases, while not strictly required in an annual report, have become a core part of sharing a company’s equity story. This section can sometimes be difficult to distinguish among peers and the points can appear fragmented. 

Structuring the investment case around what’s been achieved, what the company is currently doing that creates long-term sustainable value and where the company sees itself positioned in the future sets the foundation for a clear narrative. Following this structure would put a new lens on how the investment case is viewed internally that could encourage a more personal and distinctive narrative. 

Differentiating the approach to value creation

Ultimately, how a company is creating value for stakeholders is what most audiences are interested to understand. Articulating value creation clearly in the business model is core to this part of the story. 

Stripping the business model of generic content, such as resources and relationships, allows companies to focus more on what their competitive moat looks like, what they do, including how they generate revenue, and their role in the value chain. Additionally, there is more room to show how the value creation process enables strategic outcomes and sustainability priorities.  

Brunswick Creative encourages companies to push boundaries and explore new, innovative ways of communicating key messages. While the ideas proposed here may not set a new status quo, hopefully it encourages debate around new ways to communicate, and in doing so, the annual report can be transformed into a more effective engagement tool that engages multiple audiences and emphasises a company’s strengths.