Annual reports can be useful documents for your stakeholders—if they’re prepared properly. All too often, an annual report is a bland, meaningless collection of buzz words, truisms that apply to any business and vague promises of growth or innovation. To make your annual report a valuable document, here are 10 do’s and don’ts for your company’s next edition.
- Don’t be wishy-washy about your goals for the coming year. Don’t use phrases like “increase sales” or “grow market share.”
- Do be specific about your goals for the coming year in your annual report. Remember, a goal must be realistic and quantifiable. “Increase sales by five percent by the last quarter of next year” is quantifiable and sounds realistic. “Dominate the market by the end of the first quarter” doesn’t seem to be either.
- Don’t cite generic risks to your company that apply to anyone in business. For example, “Because of the economy, 2015 could be another tough year” is a throwaway that applies to almost any company anywhere.
- Do cite specific risks to your company in your industry. “Uncertainty over federal regulations on fracking will likely lead to slower investment in natural gas drilling equipment for the next year to 18 months.”
- Don’t try to greenwash your company or talk about social responsibility in generic terms in an annual report. For example, “Here at Pollute-co, Inc., we’re committed to a cleaner environment and taking care of our employees” is meaningless.
- Do give specifics about your company’s environmental and social responsibility efforts. “Thanks to a company-wide energy audit, Pollute-co, Inc., reduced its electrical use by 11 percent and cut back its diesel fuel consumption by 8 percent, resulting in $400,000 in savings. We also instituted an employee hotline to help employees better understand the Affordable Care Act.”
- Don’t use buzzwords and industry-speak. For example, “This product will push the envelope brand and demonstrate cutting-edge performance in the cloud” is gobbledy-gook. (See the Wall Street Journal’s Business Buzzwords Generator.)
- Do explain processes intelligently, but in plain English.
- Don’t cite vague facts or opinions.
- Do cite verified research and peer-reviewed articles.
If you follow these guidelines, you can ensure your next annual report isn’t fodder for the office shredder, but an important document that will be read.