[Editor’s Note: Even experienced PR professionals need a refresher on the basics periodically, as well as insight about newer concepts. Whether it’s how to become a better writer or a review of PR ethics, we aim to provide you with content about a variety of topics and issues. Hence, our Explainer series.]
Previous posts looked at Barcelona Principles, the Metaverse, employee resource groups (ERGs), NIL, social conversation platforms, bounce rate, off the record and sonic branding (amongst others). Today we review the components of an annual report and where it belongs in a communications strategy.
If there are topics you’d like to see discussed in this series, please let us know.]
What Is an Annual Report?
Annual reports tell the story of an organization’s financial achievements (and losses) over the fiscal year. They provide a clear yet in-depth overview of operations, financial status and cost analysis for stakeholders (including shareholders, employees and investors).
Components of an annual report can include:
- A note from leadership
- Financial statements (budgets, cash flow, profit/loss, etc.)
- Analysis on the company or organization’s performance including future casting and risks
- Achievements, key initiatives and plans for the future
Annual reports are due to stakeholders within 60 days of the end of an organization’s fiscal year (and release of earnings statement).
Why Annual Reports Matter to Communicators
Organizations (particularly PR departments) do not spend countless hours compiling these extensive annual reports just for legal reasons. They also build trust with stakeholders because they put everything financial out in the open. Many organizations include the reports as part of their communications strategy. They may serve as a content piece to potentially attract new donors, investors or employees as well as retain those already connected to the brand.
“Before the earnings announcement, communications professionals must define the earnings narrative and the messages that leadership wants to convey about the company's performance,” says Ted Birkhahn, Managing Director at Vested. “For it to be credible, messaging and positioning should always be intentional, transparent and accurate, and infuse a healthy dose of storytelling that brings critical points to life for all audiences to understand.”
Birkhan also notes that how the annual report is communicated once it’s complete is important.
“It's essential to plan in advance how the earnings information will be shared with internal and external audiences, and how the business will handle follow-up inquiries,” he says. “This ensures the effective dissemination of earnings information and helps manage follow-up inquiries.”
More resources for annual reports and financial communication:
- One and Done No More: How to Use the Annual Report to Feed Content Needs All Year Round
- How to Prepare an Annual Report (Harvard Business School)
- Online or In Print, the Annual Report Serves as a Powerful PR Tool
- Annual Reports: Not Sexy, But Crucial
- PR Roundup: Big Dad Energy, Axios’s Layoff Blunder, Financial Comms and Market Panic
- Advice for the Next Generation of Women Financial Communications Leaders
- AP Style Update: Financial Markets
- How Boston’s TD Garden Fits into a Bank’s Corporate Narrative
Nicole Schuman is managing editor for PRNEWS. Follow her @buffalogal