Investor Relations - A Practical Guide - Investis

Reviewing annual reports (both
printed and online) for the Investor
Relations Society’s Best Practice
Awards, it is noticeable that there are
considerable differences in
performance.
Many companies communicate their strategy,
performance, governance and risks effectively
in their annual reports, presenting the
information in such a way that enables readers
to quickly understand each aspect.
However in many cases strategy is not clearly
stated up front and business drivers are not
explained. It was also felt that discussion on
corporate governance, an area which is coming
under much closer scrutiny and one where there
is an opportunity for companies to show how
best practice is embedded in their culture,
could be improved.
The challenge going forward therefore is for
companies to be clearer, briefer and more
strategic with the content of their annual
reports so that they gain the attention of
investors.
Michael Mitchell
General Manager,
The Investor Relations Society
Indeed, it is these and other ‘softer’ elements of
company reporting that have come more to the
fore in recent years – partly as a result of the
changing regulatory environment and partly due to
changing focus from companies and investors.
Increasingly, companies are including a range of
‘non-financial’ key performance indicators (KPIs)
alongside the more traditional financial measures
of performance. These range from indicators such
as ‘footfall per unit’ in the case of, say, a retail
operation to those associated with corporate
responsibility programmes, such as environmental
and employee satisfaction indicators. The idea
behind this non-financial focus is to give readers a
wider appreciation of how the company is
operating along with other reputational factors that
might impact the bottom line.
Design
There is, of course, little point in drawing together
lots of detailed financial and non-financial
information if no-one can access the information or
no-one wants to access the information because it
looks too complicated. Many companies nowadays
hire the services of annual report design and
consultancy specialists to help them structure and
design the content – in both print and online. The
navigational aids and look and feel should be
specifically designed to help guide readers through
the maze of information included within the report.
It is also worth bearing in mind that your audiences
will want to access the information in different
ways. Some will want to read all of the content in
depth, but many will be looking for a quick read
approach, so pulling out key messages and
content is crucial.
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Building the Investor Relations Programme