This is it. The next tool to add to your arsenal of sharp communication instruments: integrated reporting.
The big picture
We’re talking about a 20-page document that explains your company’s financial strategy with a clear link to corporate and social responsibility commitments. In other words, it presents the big picture. The document should clearly lay out the essentials for analyzing your company, highlighting the major stakes and challenges it faces and putting your long-term strategy in context.
Given the vast financial and geopolitical changes happening around the globe, investors increasingly need clarity and reassurance. We think integrated reporting is the most direct response to this need.
It’s all about sustainability and financial stability, as pointed out by the International Integrated Reporting Council.
What does it look like?
Here is one example, from Schneider Electric.
We recently consulted with our user group of European analysts, hailing from financial institutions, on how to improve regulatory documents, and here is some of what they want to see:
- a strong focus on analyzing and explaining your company’s strategy
- present both past and future information with a stronger link to corporate and social responsibility
- make it easy to compare other companies with your own while respecting the specificities of each
- be consistent over time by following up on important topics
- make it concise (20-25 pages) and timely, so shareholders can see it before the annual meeting
Both financial and non-financial strategies
It is important to be selective in what you include in the document. The idea is to boil it down to what is most important. Also, it is best to have objectives that are measurable, so you can illustrate progress or show how your company is addressing weaknesses in order to build strength down the road.
When it comes to governance, be sure to explain how expertise of both the board and top management align with company strategy. Objectives need to be linked to compensation. Also, the role of sustainable development in your organization needs to be illustrated with clear links to governance.
Personal message from CEO/Chairman
This message should be closely linked to the company’s long-term sustainability. It should forge a bridge with the past, as well, highlighting the most important features of the previous year. Also, both financial and non-financial priorities should be stressed, with an explanation of how they fit a long-term strategic vision.