Articles

Digital-first: Smarter annual reports

As people walk through their neighbourhoods each day, consciously or unconsciously, they tend to check if favourite local stores are re-opening or remaining open. Their conversations with business owners may be deeper and more meaningful than before as stakeholders yearn for that sense of stability that has been lacking since early 2020. Naturally, this same concern and uncertainty is extended to bigger organisations.

In this environment, organisations need to relook at their business models and communicate to what extent those are still relevant or need to be changed. Past performance provides no indication of how well equipped an organisation is to handle the repercussions of a turning point such as the one we currently face. Increasingly, many organisations will find their stakeholder groups becoming distrustful, cautious, and more demanding on verifiable disclosures. What then is the next step in annual reporting?

Case study: The Saudi Stock Exchange

2019 marked a quantum leap for the Saudi Stock Exchange (‘Tadawul’), which ended the year entering the ranks of the world’s top 10 largest stock exchanges. Given the global restrictions across multiple fronts, how did Tadawul choose to launch its annual report for this epochal year?

Having proactively introduced its first end-to-end online HTML annual report the previous year, Tadawul was prompted to take the next step – the launch of a smart annual report. Just as smart phones were the natural evolution of the traditional mobile telephone, so too the smart annual report is the natural evolution of the traditional annual report. The technology has been there for a while but we are now in an era where it is imperative that the smart annual report is adopted with speed in order to maintain or win back investor confidence.

Why a smart annual report?

A comprehensive end-to-end online HTML annual report is very different to a PDF that happens to be online. For instance, over the past two years Tadawul’s investor base had expanded from a largely Saudi retail profile to a range of institutional, regional and other foreign investors. The smart approach allows Tadawul’s diverse audiences to consume information in ways that best suit their needs.

The experiences of Tadawul’s audiences who engaged with the Exchange’s comprehensive end-to-end online HTML are as follows.

Gail, a corporate communications professional working in Toronto:

Sophie who works with a fund manager in New York said:

Rajan, who works as an ESG consultant in London, experienced the annual report differently:

The drill-down approach helps audiences navigate the report easily and choose the information they want to read.
This page depicts a robust strategy in motion.

Winning trust

Tadawul’s foresight in migrating to digital mediums has proved timely especially given the uncertainty of the times. An effective online HTML annual report is one that easily crosses borders to keep stakeholders informed and engaged regardless of location or time.

Mediums of publication play a significant role in stakeholder communications. However, in today’s social, economic, and political context annual report preparers must also regain the waning trust of stakeholders. Evidence-based reporting plays an important role in this process. While a smart annual report captures the interest of diverse stakeholders, it also reaches out to each group and addresses their concerns along with the organisation’s efforts to effectively and efficiently create value.