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About Reg
Reg Pauffley is acknowledged as one of the most widely experienced figures in global corporate communications. Reg's credentials stem largely from his experience and success as the founder of the eponymous company, which became one of the leading UK and European corporate design consultancies for more than a decade. Under Reg's direction between 1984 and 2001, Pauffley became a recognised centre of excellence in corporate brand development, global corporate and annual reporting, multimedia and internal communications.
Reg is now at the helm of Creative Consortia Ltd, a consortium of small best-in-class firms that cover all the corporate communication needs required by international companies and organisations and includes a think tank to bring new thinking to the corporate com arena.
He has been a rating panel member for the Annual Report on Annual Reports since 2002.

On Reg
"Working with Reg on financial communication issues eg annual reporting is a great challenge"
Cees Brink, now Coordinator Strategic International Projects, Heineken

"Reg is one of those rare advisers capable of providing sage counsel while also truly listening to those he advises - an unusual combination of talents. He also has an appreciation for (and a history of) connecting people to make business happen."
Anthony Johndrow, Director, The Coca-Cola Think Tank

"He is singularly the best corporate communications strategist and implementor I have been privileged to work with to date. In addition to his manifold skills in corporate comms and business strategy, Reg also stands out as someone who took the time to learn and understand the capabilities of digital media so that he could better integrate it into conversations and project work."
Julian Blom, Senior Information Architect, Corporate Edge-Likemind

"In a trans-Atlantic team-building project for a major corporate re-branding effort, Reg brought a seasoned perspective and deft client touch throughout every phase. He moves smoothly between strategic and tactical tasks, wins clients' confidence with his solid communication skills, and was a creative contributor to our successful outcome."
Lindsay Beaman, Owner, Lindsay Beaman Corporate & Marketing Communications, Inc.

Contact Reg

Send your message and start talking to Reg: reg.p@creativeconsortia.com. Read and comment about what Reg thinks on corporate reporting examples and trends on: http://whosdoingwhatincorporatereporting.com/.



The written word

By Reg Pauffley

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I'd like to kick off with one of my favourite subjects; the quality of writing, or should I say the lack of it, when it comes to the annual report.
It's my view that a majority of annual reports fail to communicate or engage with the reader. Most are written in a language that I refer to as 'annual report speak', a financial legalistic language that automatically assumes that the reader has a PhD in finance and already possesses an in-depth knowledge of the company, what it does and the markets that it operates in.

I appreciate fully that the annual report is a statutory requirement that is produced to report on the company's performance during the previous financial year, but it also provides one of the best opportunities for a company to communicate to its wide range of stakeholders. So why don't more companies use this opportunity to tell the company's story in a well written, easy to understand, compelling and engaging manner that will not only provide greater understanding about the company and its business, but will capture the imagination of the readers too?

For one of the best examples of what I'm talking about I need to take you back ten years, to the 2000 IBM annual report, which in my view is a true benchmark for how an annual report can be written (the report ranked n°1 in the Annual Report on Annual Reports 2001). To me it's inspirational.

To give you a taster, the front cover is used as an introduction to the report (something not that frequent, by the way), and this is what it says:

You're one page away from the no-holds-barred story of one year in the life of a company. It's the story of big battles, stinging defeats and gritty comebacks.
Unexpected alliances, daring forays and game-changing discoveries.
In many ways, it's a story about the future, as well as the recent past, and about all business today. Which means it's about e-business. And one in particular.

And the story continues on Page 1:
The story of IBM is really many stories.
We're opening up new markets and extending our lead in others. We're fighting back in businesses we pioneered and changing ourselves in some fundamental ways. Last year, we absorbed our share of hits, too. But we won more than we lost. And closed the year on a high note.
All the while, we've kept working, inventing and partnering to write the next chapter of the story we started five years ago. The story of e-business.
So, while this year's report is not a simple narrative, it does yield one singular theme. It's ultimately the story of hundreds of thousands of people tackling scores of the toughest business and technological challenges over 12 intensely challenging months.
It's one story we're proud to tell.

I strongly urge you to take the time to download and read the front section of the report (go to ftp://ftp.software.ibm.com/annualreport/2000/pdf/IBM2000E.PDF).
Note that it's not just about two pages. The fifty pages of narrative were up to it, of the same writing quality and with an overall straightforward message.

I would also like to point you in the direction of two other, more recent reports that I feel are well worth looking at too.
Firstly, The Rezidor Hotel Group 2008, is written in an excellent 'business magazine' style (go to www.rezidor.com - investor & media - financial centre - annual reports - 2008 - download 2008 pdf).


And then there's WPP 2008 (and previous years) annual report, which after all should impress, it's one of the world's largest advertising and marketing groups and will have plenty of good copy writers to call upon. The report has a great fast read section at the front (go to www.wpp.com - investor centre - Financials - Annual Reports - 2008 - download pdf).


These are just three examples from a number that I could have chosen, but I hope these will really stimulate your thinking, especially amongst the report writers.
I'd be interested to hear what you think about these reports and even more your views about the quality of writing in annual reports generally.

You can reach me at reg.p@creativeconsortia.com.



In search of clarity in corporate reporting (I)

By Reg Pauffley

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I recently attended the 2010 Strategic Value in Corporate Reporting Awards in London, and I thought that you might like to know about some of the awards. These were focused on British companies. In future columns I will have opportunities to talk about international firms, as there are very good examples of best practice in the global marketplace.

The event is organised by the Strategic Planning Society (SPS), and I spent an enjoyable evening finding out more about the Society, and its fundamental belief that future potential and worth can be judged by how well a company puts into words its strategic thinking. Indeed, these awards are presented to companies that demonstrate the highest standards of strategy disclosure and commentary in their annual reporting. The keynote speech was made by Stephen Haddrill, Chief Executive of the Financial Reporting Council. During a very interesting speech, Stephen said that "it is fundamentally important that good reporting gives investors and the public an understanding of what the business is trying to achieve, and that its business model and strategy is clear...the narrative plays a central part in achieving this".

In its literature, the SPS sets out how the effective use of narrative in corporate reporting, and particularly the part that strategy-related commentary plays in it, is a long overdue evolution of how the world judges and values companies. Their position is that we can all compare companies today as part of the reporting framework driven by statutory requirements, but how a company articulates its strategic thinking, planning and management offers a much more sophisticated measure. I agree wholeheartedly with this, that for all stakeholders to interpret the future success of a company, they need to know and to understand what the business strategy is.

It was fascinating to learn from the SPS that the average difference between book value and market value of listed companies has grown in the last 50 years from a typical ratio of 1.25 to 1, to more than 3 to 1.
As they point out, "what makes up this growing pot of hidden value?"
Clearly numbers, whilst important, are not as helpful as a basis to forecast future performance as we might expect. When it comes to the future, words are more important than numbers and particularly when those words are expressed using the discipline of corporate strategy. We all know that just as companies file their accounts annually, so they must also file a narrative report as part of that same document. Best practice dictates that a narrative report should contain details of their objectives and strategy, operational performance and key performance indicators, principal risks and uncertainties, resources and strengths as well as commitment to social ethical and environmental matters. And so stakeholders can make comparisons. The SPS says the apparent correlation between the quantity of narrative disclosure in annual reporting and share price information was documented first by academics in the US in the late 1990s. But where the SPS, together with the specialist research firm FutureValue (go to http://www.futurevalue.co.uk/), have taken this a very significant step further is to compare not the quantity of words, but the quality of narrative in annual reports.
They have established that the actual quality of strategic capability that a company puts into its narrative reporting provides an indicator of the potential to achieve high levels of performance and sustain growth. Each company uses the same regulation and has access to the same guidance to produce its narrative, and so has the same opportunity to add the maximum value going forward. The investment banking division of the French BNP Paribas, has validated the methodology, and is looking at building an index using it.

The SPS applies FutureValue's Strategic Value Analysis technique, with its individual comparative assessment of FTSE350 companies, as the rigorous, uncompromising standard for selecting the winners. The 2010 awards relate to content of Annual Reports for years ending between 1 October 2008 and 30 September 2009. For those who have missed the event and results I will review some of the awards -and awarded reports- on a number of key... strategic issues.

Best Strategy and Objectives
At the core of a Company's annual reporting and the disclosure of its capacity to generate future value is the narrative exposition of its objectives and strategy. The exemplary strategy discussion will: review industry, markets and competition; explain the business model; outline purpose and mission as well as goals and define the strategies to achieve those goals. It will also address divisional as well as group strategy and objectives, where appropriate. This award recognises the most coherent and complete articulation of objectives and strategy by a FTSE100 or FTSE250 Company.

Of the four companies short-listed for this award, the judges concluded that one evidenced notably a group-wide capacity for strategic thinking. There is a strong, pervasive strategic theme to the Brit Insurance Holdings' 2008 narrative - at Group, business unit and functional levels - communicating the sense of a business that is strategically led and strategically managed. All too often use of a 'Q&A' style in a CEO's report can seem trite and insubstantial, and this is invariably due to the quality of the questions posed to the CEO. Here the questions are strategic, focused and help to knit the strategic value adding narrative into the cohesive whole of the narrative and the Annual Report.

Other shortlisted companies were: Aggreko, British Airways, National Grid.

Best Strengths and Resources
Growth strategy requires continuing investment in the enterprise. Most of this investment in customers, employees, partners, suppliers, distributors and the organisation itself is beyond the balance sheet in hidden assets that are the strengths and resources essential to future growth. Companies that think strategically understand how these strengths and resources are fundamental to their future success. They also know that it is important to communicate those strengths and resources as evidence of the capability that will enable them to deliver their strategy and achieve their goals. This award recognises the most comprehensive coverage by a FTSE100 or FTSE250 company.

Strengths and resources coverage in an Annual Report is the collective expression of a company's strategic capability. This array of references dotted through the narrative provides Report users with evidence of investment in the underlying capabilities the company in question needs to deliver its strategy and achieve goals. Each of the four short-listed companies does this particularly and consistently well. This year, in the judges' opinion one company, Amlin, matched its reported investment in strengths and resources most closely to the demands of its strategy with a particular focus on knowledge, process and leadership. Amlin also managed to capture how it is working across its organisational boundaries with its partners, distributors and suppliers to leverage value.

Other shortlisted companies were: Legal & General Group, Premier Farnell, Serco Group.

Best Sustainability Reporting
This is a new award this year. Sustainability is integral to strategic thinking and to strategic management. Many companies prepare a separate sustainability or corporate responsibility report. What really matters, 'though, is for a company to show how it integrates its approach to social, ethical, environmental matters and the related governance processes into the overall strategy for the business. The Annual Report is the key document for demonstrating the interdependent linkage and communicating the coherent discussion. This award recognises the best sustainability in annual reporting by a FTSE100 or a FTSE250 Company.

This is a new award this year. Sustainability is integral to strategic thinking and strategic management. Many companies prepare a separate sustainability or corporate responsibility report. What really matters, 'though, is for a company to show how it integrates its approach to social, ethical, environmental and the related governance processes into the strategy for its business. The Annual Report is the key document for demonstrating this interdependent linkage. There are two mining companies in the short list reflecting major strides being made in this sector and both of these are exemplary. A majority decision by the judges resulted in the award going to Rio Tinto for its 2008 Annual Report. Rio Tinto conveyed to its Report users an integral commitment, sensitivity to a wide range of stakeholders, close attention to environmental management and a fundamentally ethical approach. Independent assurance and external validation serve to confirm the Group's credentials on this issue.

Other shortlisted companies were: Land Securities Group, Lonmin, Northumbrian Water Group.

Do you think companies -and your company- are equipped to meet the challenge? Let me know your views by e-mailing me to reg.p@creativeconsortia.com



In search of clarity in corporate reporting (II)

By Reg Pauffley

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Second part of my column about 2010 Strategic Value in Corporate Reporting Awards in London.

Most Compelling Narrative
It takes more than just good strategic content in an annual report narrative for a company to inspire confidence. It requires a well-communicated and coherent discussion of all the essential strategic value-adding components to engage and enthuse the reader - whoever that may be, whether analyst, professional investor, retail investor or other stakeholder. This is about more than mere words. A truly compelling narrative provides an unparalleled understanding of the business. This award recognises the most persuasive and compelling story in an Annual Report by a FTSE100 or FTSE250 Company.

This is about reporting narrative that tells a really good story to keep its readers' interest and attention throughout, leaving them at the end with a sense of open, objective and transparent reporting that has revealed the realities of the company. The judges were unanimous in their selection of Aggreko for the winner of this award. In its 2008 Annual Report Aggreko developed a fascinating narrative that explored in depth the business, its markets and its strategy. Few companies go to these lengths to engage and enthuse their Report users. It is hard for the reader not to feel the passion or buy into the strategic leadership that the Aggreko narrative displays.

Other shortlisted companies were: Capita Group, PartyGaming, Vodafone Group.

Most Improved Narrative
There is a growing awareness of the importance of forward-looking content in corporate reporting and of the benefits this can confer. Much of the change and improvement in narrative reporting is incremental. Only a few companies attempt anything more radical, and there is good reason. Improving substantially a company's reporting narrative presents a significant challenge to those who undertake it - a challenge that usually has as much to do with change in the business as a whole as it does with how the business is reported. The Society believes the very best of these challenging efforts deserves recognition.

Substantial improvement in a company's reporting narrative reflects an awakening to the power of more open, transparent and objective reporting for the benefit of all stakeholders, and indirectly to the possibilities of adding strategic value. Each of the four short-listed companies made a significant step change in the quality of their reporting in this 2008/09 reporting cycle compared to the previous period, although three still have a long way to go to join the 'Strategic Value Vanguard' of companies that have particularly high scores. Only one, Lonmin, has moved close to achieving that august 'Vanguard' status. Lonmin added strategic value in virtually every aspect of its reporting narrative this year, projecting the confident image of a company ready for the economic upturn. There is a solid sense of strategic direction, good evidence of strategy in action, a strong and well-explored future focus and a comprehensive and integral sustainability review. The judges were unanimous in their final decision.

Other shortlisted companies were: ARM Holdings, Diageo, Greene King.

Best Online Annual Reporting
The 'Strategic Value in Corporate Reporting' Awards focus on the message more than on the medium used in corporate reporting, but legislative changes concerning electronic communication of annual reports link message and medium uniquely. Online reporting can assist persuasive communication of strategic value added leading to a more rapid assimilation of the strategic message by novice stakeholder and expert analyst alike. For this reason this award recognises the most effective use of the online medium in annual corporate reporting by a FTSE100 and FTSE250 company as a contributor to the process of adding strategic value.

The correlation between adding strategic value in the Annual Report and any impact on share price performance is all to do with influencing investor confidence. In this respect any switch to the use of the online medium may well be very important. All off the four short-listed companies for this award make effective use of the online medium. The judges feel that one in FTSE100, TUI Travel, made its Annual Report the most usable to the full span of its Report users, whatever their expertise or experience of corporate reporting. Good creative use of the internet, effective interactivity and ease of navigability all contribute to the overall usability of the online version of TUI Travel's 2009 Annual Report.

There is a discernible trend among FTSE250 companies to invest in the online medium to extend and enhance communication of their Annual Reports without investing first in any improvement to the actual narrative content and the strategic value the narrative adds. A notable exception to this undesirable trend is Greene King, short-listed for the 'Most Improved Narrative' award as well as for this award. The judges particularly like Greene King's 2009 online Annual Report because it recognises the importance of the key rules of web presentation and human-computer interface. It scored full marks for navigability, usability and creativity. A shortage of interactivity - hyperlinks to integrate the key content - was the only substantive weakness.

Other shortlisted companies were: Barclays, Legal & General Group, Marks and Spencer, Ladbrokes, Logica, Premier Farnell.

Best Overall Strategic Value Added in an Annual Report
Words are to narrative and the future performance of a company what numbers are to accounting and its historical performance. Best practice guidance underpinned by statutory requirement provides a framework for comparability of future potential in Annual Reports to mirror the accounting conventions and record of historical achievement in Annual Accounts. Through effective narrative companies can demonstrate strategic leadership and add strategic value. It requires clear articulation of strategic thinking, effective evidence of strategic management and expansive illustration of underlying strategic capability. This award acknowledges the FTSE 100 and FTSE250 companies that add the most strategic value in its corporate reporting.

The four companies in the FTSE250 index vying for this honour come from very different sectors - insurance, electronic equipment, water utilities and online gaming. Each faces very different challenges in sustaining performance and achieving growth. Indeed, one of them has already received recognition from the Society in 2009. But, it is the water utility that ultimately held the judges' focus this year. Northumbrian Water Group's 2009 Annual Report provides a comprehensive demonstration of strategic leadership. The judges are of the opinion that Report users will be left without any doubt that this is a Company that thinks strategically; pursues effective strategic management; invests appropriately in its underlying strategic capability; and, demonstrates a fundamental, integral commitment to sustainability.

The four companies short-listed for this award in FTSE100 were the highest scoring in FutureValue's Strategic Value Ranking in the 2008/09 reporting cycle (go to http://www.futurevalue.co.uk for more). Cadbury was not only the highest scoring in this reporting cycle, it also made a return to this highest standard with an improvement on 2007/08 when the Company had partly taken its eyes off the corporate reporting 'ball' at the time of its Beverages business unit de-merger. The SPS judges considered whether a company that is no longer listed or independent should still be able to win and opined in this case that Cadbury should. Over the last few years the Company has consistently demonstrated in its corporate reporting exemplary standards of strategic thinking, strategic management and strategic capability. We have now lost this irreplaceable corporate reporting role model. Cadbury deserves the recognition, and at least some of those responsible were still there to enjoy this accolade.

Other shortlisted companies were: Brit Insurance Holdings, Halma, PartyGaming, Capita Group, Land Securities Group, Rolls-Royce.

So, a lot of interesting detail there, and a lot to think about. I'd like to end today with another quote from the Strategic Planning Society, and it is: "Now, narrative reporting - words more than just figures - provides a proxy to indicate future value".

Do you think companies -and your company- are equipped to meet the challenge? Let me know your views by e-mailing me to reg.p@creativeconsortia.com.



Clarity, story and strategy
(Continuing the search for clarity)

By Reg Pauffley

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As the 'Strategic Value in Corporate Reporting Awards' include UK based companies only (see my previous columns), I thought it would be good to look beyond the UK to see what others are doing. Here are a few that I think stand out, and although I know that you can view each report on screen as a PDF, I would strongly recommend that you request a hard copy of each as well. This is an area that is well worth debating at some point - the role of the printed report versus an online PDF or html version. Any thoughts welcome!


My first selection is the German based group, Metro Group, which is the world's third largest retail group in terms of sales.

It's an excellent report overall, although rather bulky at 218 pages.
The reader is provided with a very good level of insight into the ongoing strategy for the business through its 'Shape 2012' programme. The strategy narrative covers 15 pages, including an informative interview with the CEO, Dr Eckhard Cordes.
Also, take a look at the magazine, which is inserted in the inside front cover; it talks about the 'Shape 2012' strategy from a customer perspective and includes some lovely photography.

To download the various sections in PDF format or order a hard copy go to: www.metrogroup.de/annualreport


Next, it's a Dutch based group, AzkoNobel, the world's largest paints and coatings company and a major producer of specialty chemicals.
A very visually compelling annual report, well structured with very instructive content. Again an excellent strategic narrative, which starts on page 3 and runs to page 23. I especially like the Strategic ambitions and agenda sections on pages 16 to 23.
The business performance reviews are also well written and extremely informative. There's a good 'at a glance' section on the inside front cover, which also includes the key performance indicators from both a group and divisional perspective.
This is also one of the growing number of reports that includes a comprehensive facts and figures section on sustainability.

Make sure that you look at the online version too, it really does add value, it's not just print on screen. Excellent use of charting, tools and video and it even includes a download for E-Book readers.

To take a look at the online version and to download various sections in PDF format or order a hard copy go to: www.akzonobel.com/report


Now for the Canadian group, PotashCorp, which is the world's largest fertilizer enterprise by capacity.
This report is split into two books; 2009 Summary Accountability Report, titled 'The simple truth' and 2009 Financial Review Annual Report which is titled 'The simple facts'.
I liked the inclusion of a Comparison to Peers and the 6 Keys to Understanding PotashCorp is very informative. Something that I've not seen before is a SWOT analysis of each of the divisions, looking at the strengths, weaknesses, opportunities and threats, which appear in the MD&A section. It's well written and provides a really in-depth view of the company, its strategy, performance and opportunities. The five operating goals that drive the strategies of the company are covered from page 9 to 31 in the Summary Accountability Report.

To download either report in PDF form go to www.potashcorp.com/annual_reports/2009/our_story


Finally, one of my favourite reports for several years now is a Japanese company by the name of Asahi Breweries. (You may have tasted the beer, it's very good).
This year's annual report, which was published recently, clearly states its key message on the front cover, Asahi World - Vision and Strategies for 2015. The report always provides the reader with a clear insight of where the business is going, what it's already achieved and how it will achieve its ambitions. It also provides a high level of detail in the form of charts, market information and trends throughout the report, but I especially like the Fact sheets/Market Information at the rear of the book on page 87.
Another good point about this report is that it also gets a lot of information across in a relatively short number of pages, 96 this year.

To download the whole report or various sections in PDF format go to www.asahibeer.co.jp/english/ir/annual_rep/index.html

I hope that you enjoy these reports and if you've got any comments or thoughts, I'd love to hear them. Get in touch with me at reg.p@creativeconsortia.com.



Sri Lanka is still about tea and also has interesting annual reports

By Reg Pauffley

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I was recently in Colombo, the capital of Sri Lanka, a country still much known for its tea production -who has not heard about or drunk Ceylon tea? There I discovered some really interesting work on annual reports being produced by a company called Smart Media (www.smart.lk). One of the most striking aspects of their work is that a number of annual reports have the Sustainability Report included as an integral part of the report. I feel that this is very effective and is something that more companies around the world should consider in the future.

I've selected three reports for you to take a look at, the first is the Bank of Ceylon. I feel this report is probably the most creative in its approach and overall communication theme, which is based on 'What Matters' ('the flow of local events make us realise that it is no longer enough for us to go with the flow. New vistas need new answers...answers that must spring from deep analysis of self and revisited fundamentals.')


It's a comprehensive report which is well written and adopts a very adventurous visual style. Wacky design, but exciting.

(you can download the report via this http://www.boc.lk/bochome1/Annual%20Report%202009/BOC%20A-R%202009.pdf link but it's a big file so be patient or use the attached PDF file to get a preview)


The next report is for a company called DPL, (Dipped Products Ltd), which is one of the world's leading suppliers of natural and synthetic latex based domestic, industrial and medical gloves. I've included this report because the overall theme is a review of the Value Drivers, and the question, 'where does true value lie?' is answered throughout the narrative section.

It makes compelling reading.

(you can download the report via this link: http://www.dplgroup.com/Financial%20Reports/2009-2010/Dipped%20Products%20PLC%20Annual%20Report%202009-10.pdf)


The third report is for Hayleys Plc, which is today one of the largest Sri Lankan multinationals. It is a publicly quoted company with a portfolio of globally competitive core businesses - Global Markets & Manufacturing, Agriculture & Agri Business, Transportation & Infrastructure and Consumer Products & Leisure.

It's a well presented report that clearly sets out the group's core story, what it does, what it's achieved and how it will go forward. I especially like the Portfolio Highlights in pictures, numbers and the words section. This is also another good example of a report with an integral Sustainability Report, which in this case runs from page 34 to 79.

A solid, well executed piece of communication.

(you can download the report via this link: http://www.hayleys.com/annual-reports/2009-2010/annual-report.pdf)

You thought Sri Lanka was just about tea (some reports show you it's more than this)? Think twice. Some of the annual reports created and produced on the island may be inspiring for many.

Let me know what you think about these and beyond at reg.p@creativeconsortia.com.



Where have all the report designers gone?

By Reg Pauffley

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Many of the reports are full of very good content and some are well written, however the overriding factor for me this year has been the lack of really outstanding design. Designwise, not that many of the reports are truly compelling or engaging. Is it lack of budget or are designers suffering from too much compliance, or is it confusion between off and online?
It seems to me that we're going through a period where competition for the audience's attention is greater then ever before, so reports need to be working harder than ever before to grab that attention and communicate effectively. I'd like to highlight some that I feel excel from a design perspective and, at least for some, put this up to their content.

I'm going to start with LVMH (France), a report which really captures and reflects the personality and nature of the business. You might of course expect a luxury group to produce a stylish report, but this continues to surprise at every level. It makes use of excellent photography and typography to create a powerful, high quality piece of design. The cover is stunning.


Next is AkzoNobel (Netherlands), where the designer has created a report bursting with energy through the use of graphics, colour and photography. It's a good example of a landscape format that works, it's user friendly and not too long either - 160 pages in total, which includes a 20-page sustainability section. Make sure you look at the online version too as this is one of the -rare- examples where the print and the web reporting vehicles supplement each other finely.


How for a German group? Here is AUDI. A report which is beautifully produced (although typically long). It charms with a variety of visual styles, held together with clean, informative typography. The result is that the audience is presented with an engaging journey through the report. An elegant, stylish report that truly reflects the brand values of the company.


Daiwa House is a Japanese based group. This report uses the management vision of "Connecting Hearts" as its overall communication theme and conveys this in an authentic way throughout. The designer has created an intriguing pace to the flow of the information, aligned with an all-embracing sense of calm. Ultimately, the report invites the reader to become involved with the content at whatever level that suits. A sensitive and revealing piece of design.


It's a cool beer next in the shape of Heineken (Netherlands). Here the designer has used a bold graphical style of illustration mixed with photography to support the story of the business. The report is lively and exciting and convincingly projects the brand essence and marketing style of Heineken. It's got great read appeal.


Now on to Danone (France). Here is an outstanding example of a magazine-style annual report. It's very reader friendly, both from the design angle and the way it's written. It provides an excellent level of insight into the company, the way it works, its strategy going forward, its beliefs and its values. It's a very effective, well designed and compelling piece of communication.


Let's end on a sweet note. Tate & Lyle (Britain), a striking example of a predominately typographical annual report. The designer has used colour and typography well to produce an informative and easy to read annual report. The result is a simplicity that works. No easy task!


Let me know what you think and how much you care about good design at: reg.p@creativeconsortia.com.
Read also my web pages and comments on corporate reporting on: http://whosdoingwhatincorporatereporting.com



Online first - The future of annual reports?

By Reg Pauffley

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There's currently a lot of lively discussion about whether the online report will replace the printed report. Whilst there doesn't seem to be any definitive answer, one thing is certain: more and more companies are now providing an html online version as well as the printed version.
So is this the happy compromise that is the way forward for the foreseeable future? Or will more companies embrace the use of the web as the primary delivery channel for their annual report, in the way that the companies I'm going to talk about here are doing? Each has created and developed the annual report from a web first perspective, in other words treating the annual report as a website from the start, and not just simply producing an html version of a printed copy. They're all impressive and it's really worth spending time looking at each of them in detail.
You could well be looking at what will soon become the norm.

Wärtsilä - http://www.annualreport2009.wartsila.com/default.aspx
Wärtsilä is a Finnish company that describes itself as a global leader in complete lifecycle power solutions for the marine and energy markets.
When you log on via the investor tab on the main site home page, it's clearly stated that the electronic annual report is Wärtsilä's primary report for 2009, and that the Financial Review is an abbreviation of it. Once you're on the home page of the report, which is very clear and inviting, you click onto 'About this Report' to access an easy to read set of instructions on how to use the annual report website. There is a strong overall theme of 'Questions and Answers' which uses video with great effect to engage with the viewer throughout all the sections of the report. There is also a very helpful 'Quicklinks' box on the home page that is split into three sections; 'For Investors', 'For Customers' and 'For Media'. I also like the inclusion of a Sustainability section within the site.
If this their first attempt, I can't wait to see next year's report.


TNT - http://group.tnt.com/annualreports/annualreport09/index.html
TNT is one of the leading companies in the global transportation and distribution industry, with its head office in The Netherlands.
The viewer is welcomed to the site by the Group CEO, Peter Bakker, via a simple but engaging talking head video. The video provides a clear introduction to the site and what to expect from it.
Overall the site works hard, although I found the navigation a little confusing and I would like to see more links to additional information. I would also like to have seen more use of video, it could explain and show the business in action in a very compelling way.
The site perhaps doesn't quite live up to the CEO's introduction, but it's certainly a great step in the right direction. Keep it up TNT.


Sonaecom - http://www.sonae.com/rcframe.aspx?url=/CEReports2009/en/index.shtml
Sonaecom is a leading Portuguese communication services provider which has been producing a web first annual report for 3 years now. They're probably amongst the very first, if not the first to go down this route. It's an extremely user-friendly site, with a clear, easy to use menu covering six sections in addition to the Home page - 'Our year', 'Our business', 'Our shares', 'Our management', 'Our governance', and 'Our performance'. Each section has a further drop down menu with its own landing page. The highlighted introductions here work very well.
Overall, the site creates an excellent user experience, provides a good level of content and includes many links to additional information.
It's a shame however that the site doesn't use video or charting tools, and the downloadable pdf is a very simple and functional piece of print.
This aside, it's a great role model for other companies.


Ahold - http://www.annualreport2009.ahold.com
Ahold is an international group of quality supermarkets based in the United States and Europe, and like TNT, it is headquartered in The Netherlands. Both the annual and CR reports have been produced on the basis of web first with a basic print pdf offered as a download. Both are similar in look and feel - clean, crisp, bold and colourful and both have easy to use navigation, which all results in an excellent overall user experience.
The site displays a very good use of tools, including comprehensive charting, a 'build your own report' and 'compare to 2008'. Each would benefit from using video, but overall another good example of a web first approach.
Ahold has just changed agency, so it will be interesting to see how it develops next year.


Network Rail - CR Report - http://www.networkrail.co.uk/aspx/114.aspx
Network Rail runs, maintains and develops Britain's tracks, signalling systems, rail bridges, tunnels, level crossings, viaducts and 18 key stations.
This is an innovative piece of work that I've talked about before as a great example of a web driven approach. The site uses a number of interactive information graphics to introduce each of the key areas of the report. Each image includes a number of pop up text panels when you scroll over, which in turn provides you with an in-depth review of that particular section. It's been embedded into the main Network Rail website under the Community & Environment tab.
I feel sure a web first main annual report must be just down the line for Network Rail.


Let me know what you think about these and beyond at reg.p@creativeconsortia.com.
Read also my web pages and comments on corporate reporting: http://whosdoingwhatincorporatereporting.com



All to play for - Making the most of what's on offer

By Reg Pauffley

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I'm really looking forward to see how companies approach their corporate reporting this year. How many will provide an iPad application? How many will use video in the online version? Which companies will include an integrated sustainability report? Who will use social media in some way, or even produce a web first based report, with the availability of a print variant?

Audiences now expect so much more in terms of choice, both in delivery and content. By using today's unprecedented selection of channels and platforms to deliver the facts, figures and investment case, companies can add real value and increase the overall effectiveness of their communication. Will they seize the opportunity?

Well, I certainly haven't been disappointed by some of the first crop of December year-end reports that have just been published. But what's clear is that there is a real mixture of trendsetters and those resistant to change. Perhaps they're waiting to see what others do first.



Let me start with a couple of trendsetters. First the Dutch-based group AkzoNobel. Following on from last year's success, the chemical group has again produced a visually compelling and well- structured report, both in print form and in full html format. It delivers excellent strategic narrative, business performance reviews and provides the reader with a clear, well balanced insight into the group. It clearly articulates the company's ambitions, and how it will achieve them.

The online version is still very user friendly and provides real added value through the use of interactive figures, the ability to create your own charts, pdf and download a wide range of XLS files. The introduction video by the CEO, Hans Wijers is excellent. It's very well scripted and delivered, and I particularly like the fact that it's not just a talking head, it's cut with graphics and footage showing activities, as in a mini-documentary. A good role model for others.
It's also very exciting to see that the online version is among the first to be available for the iPad as a free app.
Go to http://report.akzonobel.com/2010/ar/servicepages/welcome.html to view the online and download the printed version.



The next example that falls into the trendsetter category is one of the world's leading diversified industrial groups, German-based Siemens. I like both the printed version and online, although in my view the online does not deliver quite as much added value as AkzoNobel, and is split between html and pdf format. However, both versions have good, strong content and the online makes excellent use of well produced informative videos.

The printed version is two books in one. The "Company Report" is divided into six chapters (Introduction, Foundation, Structure, Directions, One Siemens and Vision), supported by three in-depth product stories. Together, these provide the reader with a good understanding of what makes Siemens tick - its approach, purpose, strategy and culture. The second book is a substantial "Financial Report" It's all good content but the downside is that the whole report comes in at 275 pages.

Although there's room for improvement in the online, overall the report provides a highly effective package. It's especially good to see an innovative company like Siemens using an innovative approach like an iPad app to deliver its corporate reporting.

Go to http://www.siemens.com/annual/10/en/index.html to view the online and to download the printed version.

The other three that make up this early crop are also large multinational groups, two from Germany and one from Switzerland. All three are producing very informative and reports rich in content, but reports that are unfortunately looking the same year on year, which I believe could impact on how well they are communicating with their audiences.

I'm not advocating change for change sake, but I do believe that a company should review each year how its corporate reporting is communicating. Crucially, is it delivering what its audiences want, and in a way and manner they want it?



First, Bayer. A report that when you first pick it up feels like it's going to provide you with everything you need to know about the company, what it does, how it does it, its markets, its purpose and its strategy for the future. But it's somewhat disjointed and lacking in clarity. Virtually all the stories and visuals are from the Bayer perspective, with men and women in white coats in laboratories. It's my sense that the report would be more compelling if the stories came from a more customer-centric point of view, showing how Bayer impacts on its markets and customers around the world.

As for the online it's just too busy and confused. The news style approach leaves the user not knowing where to go first. But it does use video and some flash-based presentations.

I believe Bayer possesses all the ingredients to be a great communicator, it just needs to bring some fresh thinking to how it delivers its story.



Next, it's Henkel, which again is very much in the Henkel look and feel, a lot of information, delivered in a somewhat reserved manner. I'm pleased to see that this year the cover is just one full bleed photograph supporting the new positioning of "Excellence is our Passion", and that the narrative focuses on "putting customers at the center of what we do." I do feel that the report would benefit from having a more relaxed style, perhaps using the style of a corporate magazine to create a more engaging read?

The Sustainability report is easier to read, and uses many more soundbites and graphics. It's a shame the front cover photograph is so static.
The two reports together are referred to as the Henkel Corporate Report, highlighted on the group website. It has its own landing page, where the user can click onto either the online versions or download a pdf of the other report.
It's good to see Henkel return to producing online versions of the two reports, and I also notice on the group website the mention of Henkel and social media.

The online versions are simple, clear and easy to use, although veering on the side of print on screen with no real added value.

Overall I get the feeling from what Henkel has produced this year that it's very much a matter of 'watch this space'. Next year's corporate reporting could be pushing the boundaries in content and delivery. Another one on the brink of being an outstanding communicator.

Go to http://corporatereport.henkel.com to either view the reports online or download them as pdf files.



Finally, it's Novartis, which is, apart from a few minor layout tweaks and obviously different words, the same as last year and the year before that and the year before that. It's beautifully designed and the photography is outstanding and truly reflects the company's serious and somewhat academic approach. Novartis adopted this editorial position a number of years ago and it works for them, but I wonder if that remains the case for the various audiences.
Could there be another way of delivering this much information in a more user friendly manner whilst still maintaining overall integrity? Why not produce an online version which would at least allow the user to just download the sections that are required? At the moment it's a pdf of the whole or nothing.

I feel that it's time for Novartis to ask the difficult questions of itself, are we communicating in the most effective way?

Go to http://novartis.com/newsroom/corporate-publications/download.shtml to either download a pdf or order a hard copy.

So, based on this evidence am I still looking forward to a really interesting corporate reporting season? You bet. Bring them on, I'm sure that we're in for a real treat.

Let me know what you think about these and beyond at reg.p@creativeconsortia.com.
Read also my web pages and comments on corporate reporting: http://whosdoingwhatincorporatereporting.com



Inspiration. A report mix from mines, bikes, tyres, oil and gas

By Reg Pauffley

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I like this time of the year, it's the time I get to look at lots of annual reports from around the world for the ReportWatch ranking. It involves a truly global mix of companies, and so always turns out to be interesting. I'd like to share with you some of the annuals that I've reviewed this year, not necessarily those that are amongst the top ranking, but ones that I feel are doing something that's worth taking a look at.
Annuals that stand out, in my view, because of exceptional content or writing, or because they add real value online. Annual reports with an approach that might inspire your thinking next time round!

I'll start with Adaro Energy, which is a leading Indonesian Mining and Energy Group. It's a magazine style report, which works well overall and includes a lot of information that's delivered in a very user-friendly, engaging manner. Cameron Tough, Head of Investor Relations, says the report is based loosely on respected business magazines, such as the Harvard Business Review. The cover sets the scene well, with a strong title and a number of headlines from articles within the book. The one that stands out the most is '16 reasons to invest in Adaro'. From page 6 to page 37, the reader is presented with one reason per double page spread, it's compelling. Why don't more companies include this?
Although two thirds of this report has great read appeal, the accounts section really does need some attention in the way it's presented.



Use this link to download the report: http://www.adaro.com/files/Adaro_Energy_2010_Annual_Report_English_1.pdf

Next up is Harley Davidson, which I want to bring to your attention, not for the beauty and spirit of its products, which are of course legendary, but for the way it's written. Its style truly reflects the nature and personality of the company. The introduction, which appears on page one sets the tone of voice for the report. No pedestrian 'annual report speak' here!

"There's only one way to get anywhere in this world—and that's to make some decisive moves. Not fence-straddling. Thumb-twiddling. Buck-passing. Or chewing it over. And not running it up the flagpole. Instead, you rev it up, lean into it and go.
That was the story of Harley-Davidson in 2010. A year of putting strategy into high gear. A year when we went beyond fighting headwinds to seizing opportunities. A year of shifting preparation into iron-clad progress. All of it customer-led.
Now it's time to twist the throttle. And lean forward."



Order yourself a copy, it's a report that really is enjoyable to read. The only 'but' -and there's always a 'but'- the financials are in the basic 10-K format.
Or go to http://investor.harley-davidson.com/annual.cfm to download the 2010 book and previous years, which if you've got the time are worth looking through too.

Now for an interesting example of online reporting; Shell (www.shell.com/annualreport).
I like this because it provides choice and a good level of added value. When you click on the link, the landing page presents you with the opportunity to enter one of the four publications that Shell produces; Annual Report and Form 20-F, Annual Review and Summary Financial Statements, Sustainability Report, and Investors' Handbook. It doesn't matter which one you enter, you are connected with all four, there's a tab in the top left hand corner that allows you to interchange from one to the other. The interactive chart tool is excellent, it allows you to make a wide range of comparisons with the current year and with past years over a wide variety of performance indicators.
I really like the fact that you can turn each chart that you create into a slide or a print-out. The download manager is very useful too, it allows you to put together just the areas or pages that are of interest to you. I would also imagine that the Excel downloads are extremely useful.
Here's the 'but' for this one - I would like to see a much greater use of video, both talking heads of senior management and short films explaining areas of operation.
Overall, however, this is a good role model for others to follow.



Michelin pleasantly surprised me. Through its very user-friendly 2010 Annual and Sustainable Development Report, it delivers a great deal of insight into who and what Michelin is and how the company will continue to grow in the future.
It uses charts, graphs and soundbites of information to great effect; the 'Key Indicators', pages 6 to 9, which cover key financial, social and environmental indicators, is a great example of this.
The report is broken down into 6 key chapters; Corporate profile and governance, Challenges and strategic vision, Customers and markets, People, partners and shareholders, Natural resources and the environment, and Financial, social and environmental performance. Each contains a stand alone 'Focus' piece covering a specific area of interest. I found the focus on
'The challenges of innovation' very informative.
The complete detailed financials are in a separate document that French companies refer to as the Registration Document. Both are available on the website as downloadable PDFs.
It's a shame that the online version is just a click through of the printed version, but I strongly recommend that you order a printed copy.



Use this link to download the report: www.michelin.com/corporate/EN/finance/document

Finally, I would like to highlight Anglo American.
It's the boldness and directness of this report that caught my attention, and the way it communicates and reflects the overall theme ('Delivering Real Excellence') throughout the report. You get a real sense and feeling of the character and strength of the business. It's presented in a clean and crisp manner and has great read appeal. The highly informative narrative is very well supported by the use of soundbites, graphics, charts and high quality creative photography. I very much like the 'strategy in action' section, which is in fact part of the OFR.
The online version is well done, it too is clean, crisp and easy to navigate, but (here we go again) doesn't really add any additional value and to me it doesn't capture or convey the same character and strength that the printed version does.

You can download the report at www.angloamerican.com/investors/reports/2011rep but I would strongly suggest that you send off for a printed version. To order a copy, you have to first click on 'contact' at the top of the screen and then 'request a copy' in the left hand menu.



I hope you enjoy checking out these Annual Reports as much as I have. Let me know what you think at: reg.p@creativeconsortia.com
Read also my web pages and comments on corporate reporting on: http://whosdoingwhatincorporatereporting.com/

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