There are many things to consider when producing an annual report. One of the most important considerations is to make sure that it will be relevant and usable for a company’s stakeholders. To satisfy this, most annual reports are neatly divided into two sections;
- Company information
The ‘company information’ section will usually include a summary of what has happened over the last year, strategic goals, key performance indicators (KPIs), the progress of those goals and the plan going forward. The second section then breaks down the financial information or other performance indicators that are deemed relevant to the company and its stakeholders.
Some companies may also include a section on how they manage their resources, for example, the materials that they use and where these come from. This is often required by law to be transparent about any environmental impacts or ethical considerations in the supply chain.
Printed annual reports
There are many different types of annual report. One of the most common variations is a printed book which includes the topics mentioned above plus some additional information like staff successes, awards or other milestones that have recently been met. A company may also produce a range of supporting reports that are aimed at specific stockholders or other stakeholders with diverging interests. These may include topics such as environmental performance, corporate social responsibility and policy updates. These will likely include lots of graphs, charts and infographics as well as detailed financial information.
Digital and interactive annual reports
Another type of report is the digital annual report, which is commonly used by companies to promote their vision and values with interactive content such as videos and animated infographics. These reports are often visually immersive and are written in many languages to help engage a broad range of stakeholders.
Like their printed counterparts, a high quality digital annual report will be well structured and simple to navigate. The financial sections can be much easier to navigate as technology allows the use of filters — these help users to find specific data quickly without having to use an appendix.
Interactive infographics are another common device used in online annual reports. An infographic might include:
- A company overview structured as a timeline
- Key performance indicators
- Financial information and performance goals for the next year
- Environmental sustainability practices. For example, how they measure their greenhouse gas emissions
- Social responsibility initiatives and projects that were undertaken by the company to support employees or stakeholders. This can include diversity programs such as a mentorship scheme
How to structure an annual report
There is no correct way to structure an annual report, however, there are established practices and certain criteria that should be met. For example, it should be clear and concise for the reader. The CEO’s letter to shareholders (and other stakeholders), which will usually open the annual report, is crucial in making sure that there are no misunderstandings about what a company does or how they operate.
It is also the job of the opening statement to summarise and frame the financial data from the previous year. While stakeholders will extrapolate their information, a good introduction will give context and purpose to many of the topics covered.
From here, a company overview is usually included which can be a summary of what has happened over the last year, strategic goals, key performance indicators (KPIs) as well as reporting against progress on these goals.
The strategic plan section of an annual report is about the brand’s future. This section will set out the goals and aspirations that have been defined by the company while setting out a roadmap for how it will get there. These goals may form business pillars or territories which can be expanded upon throughout the report. The roadmap usually identifies milestones, timescales and the operational implication associated with each goal. From here, stakeholders will gain a clear understanding of where a company is headed.
Key performance indicators
Key performance indicators are an essential part of any annual report. Closely aligned with the strategic plan, a KPI will be a measure that will indicate progress against the goals outlined. These metrics can be as simple as sales revenue or more complicated such as customer spend over a specified period. Other KPI’s may take the form of turnover, recruitment or new product releases.
Success stories and staff profiles
Success stories are also a common part of any annual report. These sections look to share company milestones, awards or other successes with stakeholders. Success stories are a good way to encourage a feeling of solidarity and cohesion. They can also promote a positive working culture that values and shares success as a team. Staff profiles can also feature within an annual report. While this would traditionally detail the board of directors, it is now commonplace to feature a wider range of roles. This can help to promote diversity within an organisation, encourage positive career paths and celebrate the broad range of available skills.
Environmental Statements and other key policies
An annual report will often include an environmental sustainability section, which is all about the company’s efforts in this area. This can be done through examples such as energy consumption or recycling initiatives to help raise awareness with stakeholders around how they contribute to reducing their carbon footprint. Other corporate policies such as an Ethical Statement, Equality, Diversity and Inclusion Policy and many more can also be included.
The financial section of an annual report breaks down the financial information or other performance indicators that are deemed relevant to the company and its stakeholders. In annual reports, a company’s balance sheet will usually include the assets and liabilities as well as any other relevant information such as depreciation. This financial data will be compared with the previous year so stakeholders and investors can understand how well a business has performed over time. It is also important to include a forecast within the report, helping stakeholders understand where time and money is being focused going forward.
If your business would benefit from a fresh approach to annual reporting or general print design and production, please get in touch and we will be happy to advise on the best route forward. We recommend that a strong brand identity is defined to ensure all printed materials are unique, consistent and effective.