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IR Magazine - State of the art

13 August 2007

Highlights

-    Most annual reports aim to be bold and memorable
-    Smaller companies not afraid to get quirky
-    Compliance-minded advisors are taking the spark out of UK reports


UK conservatism

One might expect some stunts from the country known for exporting its quirky sense of humour worldwide. But surprisingly, flashy gimmicks are on the wane in the UK.

    Paul Edison, creative director for design firm Black Sun, says UK government regulations are causing a downturn in innovation. Every shareholder is entitled to a copy of the annual report, and some of the country’s largest firms have as many as 3mn investors. Factor in more stringent disclosure requirements of recent years, and the cost of producing reports can be astronomical.

    The average number of report pages for companies in the FTSE 100 has increased to 130 from 92 over the last 3 years, and the reports have become more ‘rigorous documents of record and compliance,’ Edison says.

    ‘Ten years ago, you’d often get to sit down with the chief executive, interview him or her for an hour or two, and go off and write the report,’ he continues. ‘Now company lawyers and teams of company secretaries and advisors are crawling over these things and there’s less opportunity to tell a more inventive and creative story.

    'I do less commissioning of things like photography and illustrations to tell a story. The agencies say, Look guys, we’ve done some creative things in the past, but we’ve got 40 or 50 more pages and we want to standardize.’

    About 75 percent of UK annual reports are now standard letter size, up from just 52 percent in 2004, according to Edison. Paper has also become duller: this year, about 92 percent of books use matte paper, which doesn’t hold color or print photography nearly as well as glossy paper.

    Things may change, however. The Companies Act gave UK firms the option of sending out electronic versions of their annual reports in 2006 to all investors except those who insist on a hardcopy. With all that space on the web, designers may have more room to create notable work.
 

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