Coping with annual reports on the web
The chairmans message
Several surveys, including the FASB study, have shown that the chairman's message is one of the most sought after features of an annual report. But people tend to skim over it because of its style.
Looking at a selection of chairman's messages in FTSE 100 annual reports, we found that superficially most are quite well written by print standards. But all would need reworking for web readers.
One of the main problems is length. This varies between one and three pages of A4, demanding considerable scrolling onscreen.
Paragraphs tend to be uninviting, often more than ten lines deep, with typefaces that are unsuitable for comfortable onscreen reading. Columns are too wide and usually there are no subheadings or bullet points to separate or emphasise points.
Other problems stem from addressing too wide an audience, and not prioritising the needs and interests of individual shareholders. This is apparent in the way the information is ordered. News on the year's dividend payout, for example, sometimes does not appear until about six heavy paragraphs down.
The pace tends to be slow moving and over ponderous. The feel at the beginning is often 'sit down boys and girls and I'll tell you a story', but what follows is a sleep-inducing monotone with little human touch.
Examples of openers are: 'The year 2001 was a challenging one but one in which we made significant progress in laying deeper foundations for future growth …' and 'This year a strong forward momentum has been established …'.
On the web text like this has little chance, partly because it is typical 'corporate speak' - cold, verbose and abstract. Sid Cato, whose judging of annual reports has earned him the title in America of 'Mr Annual Report', describes it as 'grandiose statements overembellished with empty phraseology'.
If such barriers to web communication are not addressed, it would be fair to accuse companies at best of not caring enough about their investors and at worst in game playing.
As Sid Cato points out, 'The online report is a haven for game players. …the made-in-heaven hiding place for the long-on-turns-of-phrase corporate chieftain who's short on meatiness.'
Next: Complexity blurs honesty
Published : 01/06/2003
