Do you remember when preparing a proxy meant simply updating the numbers? Neither do we. Those days seem so long ago, chased away by increasingly vigilant regulators armed with new rules, activist investors demanding clear explanations, proxy advisors ready to fill in gaps in your disclosure with their opinions, and, ultimately, more alert and informed shareholders. Your audience has gotten bigger, wised up and is in a hurry!
At the same time, many companies are recognizing that well-designed and simply written disclosure documents actually serve as powerful communication tools to help get messages across to shareholders. The key is to use plain language.
With our new, online tool, “Plainly”, Labrador is placing new technology in the hands of its clients to help them ensure their messages are getting across clearly. The methodology for smoothing out the rough edges of your communications actually focuses on a few simple steps:
1. Know your audience – Take time to research who your readers are and what they’re looking for. Speak clearly and simply so that you’re easily understood by readers from vastly different backgrounds.
2. Draft an outline – A clear outline will ensure your document flows logically and helps you to avoid repeating things.
3. Decide what you need and want to say, eliminate the rest – When using previous filings as a basis for your current project, streamline by taking time to carefully review previously used sections and identify what you can do without.
4. Pick a writing style – Determine the appropriate tone and style of your document and stick to it. This is particularly useful for maintaining consistency even when different people write different sections. Use the full company name or abbreviate? Personal pronouns like ‘we’ and ‘you’ to make the document less impersonal.
5. Follow Labrador’s 5 plain language writing principles
- Key information comes first – draft informative titles., start paragraphs and sentences with the main idea.
- Structure your text – use bullet point lists for more than 3 items, pace your text with titles and subheadings, insert graphics or infographics when useful.
- Write concisely and directly – write short sentences and paragraphs, structure sentences with a subject + verb + object, and avoid sentences with too many clauses.
- Address your reader – favor active form and affirmative voice, “we” instead of “the Company”.
- Use the right words – avoid jargon and Latin words, always use the same word for the same concept.
6. Use design and layout for efficient communication – Take time to consider the graphic elements of your document, including font, size of different headlines and where to align text.
Coming in April: we will be releasing a study with BVA Group on the benefits of plain language on your readership.
Updated on March 30, 2020.