Annual reports could use some life

For PR firms and communications departments at public companies large and small, the fall season symbolizes so much more than summer's close.

For PR firms and communications departments at public companies large and small, the fall season symbolizes so much more than summer's close.

It marks the starting point for when they take those important first steps toward producing what is perhaps one of the company's most important publications: its annual report. As the planning process gets under way, annual report team members may want to consider how the hard-won result of their months-long effort can grow in relevance to their ever-evolving audience of readers.

Despite the many hours and dollars spent on annual reports since 1934, when the Securities Exchange Act first required them, annual reports have barely changed over the years. The vast majority amount to little more than one-way communications from a company to its shareholders and other stakeholders.

Annual reports do not invite the two-way dialogue that many have come to expect in this digital age and that most of the public now associate with greater corporate transparency. In this dizzying decade of always-on communications, companies are failing to keep up with the times, but they can make their communications more informative and relevant by transforming elements of their traditional annual reports into "living" dialogues.

Although annual reports have clung to most of their traditional roots, they have evolved somewhat. Many, for instance, can now be found on the company's Web site and, as a result, are more accessible to shareholders and others than they have been in the past. But why limit the Internet's use to little more than an electronic bulletin board for the traditionally bound document?

Many annual report sections could go "live." It is not unrealistic to envision a future where shareholders will go to a company's annual report online for clarification or additional information on a particular point in that annual report. Currently, shareholders can submit questions to a company's investor relations department by mail, e-mail, or telephone. However, a hyperlinked query area of an annual report would facilitate stronger communication with shareholders.

In the near future, shareholders will increasingly push to express concerns to designated company representatives electronically, rather than invest time and resources traveling to an often out-of-the-way location to ask a question at the company's annual shareholder meeting.

Clearly, a company would need to avoid disclosure of confidential proprietary information and Securities and Exchange Commission-prohibited selective disclosure of material information. To manage the dialogue well, companies would have to identify the topics they can respond to, as many corporate blogs do now.

For example, General Motors' FastLane blog limits dialogue to cars and trucks. It is imaginable that "living" CEO letters to shareholders and "living" corporate responsibility reports could become standard operating procedure. In today's rapidly evolving wired marketplace, where companies are being held to increasingly higher standards of transparency, company leadership should consider taking advantage of the opportunity to engage in online dialogue with shareholders.

Leaders should make use of the Internet's immense capacity to provide meaning and a common purpose. The time for the wired living annual report has arrived.

Leslie Gaines-Ross is chief reputation strategist at Weber Shandwick.

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