The power of the letter

by Rob Berick
Download as PDF

While eulogies have been written for the annual report, research continues to show that this investor communications tool is very much alive and well. According to a recent study of buy-side investors by Rivel Research:
70 percent think the annual report is useful when making the decision to buy a stock
69 percent think the annual report is useful for helping them follow a stock in their portfolio

Not surprisingly, research shows that the Letter to Shareholders is still the most-read portion of the annual report. Not only does it allow the CEO to put the previous year's performance into strategic perspective, it affords him/her the opportunity to establish expectations and metrics for the organization going forward. And, since more investors will read this piece than will meet with the CEO, it is critical that this section of the annual report be crafted carefully to maximize its potential impact.

Getting Started
Before you put "pen to paper," be sure to:
• Review all disclosures and conference call transcripts from the past year
• Review recent non-deal road show and industry conference presentations, including any feedback from investors from those events
• Review the most recent investor perception study findings (if still relevant)
• Review current corporate marketing materials and recently added website content
• Discuss forward-looking "investor" messages and metrics with the CEO, CFO and other relevant senior leaders
• Discuss the company's governance profile as it relates to current proxy rating agency recommendations, as well as any proxy proposals, with the general counsel and corporate secretary
• Build upon the "uniqueness" of the CEO's personal style and voice – he/she personifies the company's brand and investor identity, and this intangible asset makes a real difference in the valuation
• Develop an expanded content outline for input and approval by the CEO before you start writing

The Dos and Don'ts of the Annual Letter to Shareholders
As you develop the letter, you'll want to be aware of these accepted best practices:

• Focus on the underlying question on every investor's mind: "Why is now the right time to have a position in this company's equity?"
• Establish realistic expectations for the company
• Consider expanding the parameters of the letter to address such increasingly important topics as corporate social responsibility, meaningful new product launches or an update on governance-related matters
• Keep all constituents in mind – from long-time investors to prospective employees
• Make a connection between the letter and the theme of the annual report

• Avoid addressing the "elephant(s) in the room"
• Presume readers have been following your company closely or for long
• Use industry jargon
• Overlook the Web component or alternative uses for content

Regardless of whether you produce a glossy, typeset report, a 10-K "wrap" or a Web-based platform, your company's annual report will represent your management team and present your company's value proposition for the next 12 months. A thoughtful and thought-provoking Letter to Shareholders will go a long way in determining its effectiveness.
Published by kind permission of the author and Dix & Eaton.
First published at:
If you would like to discuss your company's messaging to investors, please contact Rob Berick at 216-241-4611 or
For more on the latest developments in IR issues, see Rob's blog or follow him on Twitter (

About Rob Berick
Rob is a Senior Managing Director of Dix & Eaton, he oversees the company's investor relations practice and is a member of the firm's Leadership Committee. Over his nearly 20-year career, he has developed and executed investor relations programs for companies in a wide range of industries and market cap sizes.

About Dix & Eaton
We're an integrated communications consultancy, and we specialize in public relations, investor relations, customer communications and crisis communications. Working as partners, we bring deep experience, foresight and creativity to every relationship and help clients realize the full power of communication to drive results.

More at:

back to overview

Best annual reports

Annual Report on Annual Reports 2019

Report pick

December 2017: Phoenix Mecano
Phoenix Mecano
Stein am Rhein, Switzerland « View our previous picks

Financial sector annual reports

Evaluation - Competition

Annual reports from the financial sector are no longer selected for the Annual Report on Annual Reports competition for consistency, comparability and credibility reasons. That does not imply that there are not (sometimes very) good and improved reports in the sector. On a customized basis, keeps on evaluating and benchmarking financial sector reports.

How is your report doing?

The report scan

How is your report doing? How does your annual report score on all evaluation criteria used for the Annual Report on Annual Reports?

Order a REPORT SCAN. An edited output of desk research done by report analysts, it provides your company (or advisers) with a summary of pluses and minuses for 25 report items and reporting areas.

For more information, click here.

E-mail your order to:

Report, Google and watch

Has a/your report appeared on ReportWatch?

Has a/your (company) report/name been mentioned, watched, rated, ranked, benchmarked, cited on ReportWatch?
Or has ReportWatch been cited with reference to a/your company/report/name?
Type the (company) name followed by ReportWatch (in one word) and see if you get results.


Mike 4 faces's co-founder and ReportWatch kingpin Mike Guillaume wears a few hats, including financial reporting specialist and international economist, and has therefore good vantage points for monitoring companies, reports and management; as well as for watching economies and economics work (or not). Learn more about Mike's experience and expertise here. Read about Mike's work and views, including his recent book "The Seven Deadly Sins of Capitalism", on