The annual report is definitely not the world’s most sexy book to look at nor to read. It has no center-fold pin-ups in it so schoolboys are not likely to hide copies under their mattresses and I don’t know of any that has made either on Oprah’s or the New York Times Best seller’s list. The truth is that its contents are by no means riveting to Mr Joe Street but love it or hate it the company’s annual report is essential to your business’s and shareholder’s health and wealth — and it is changing.

The annual report is a company’s most important strategic communication document. Published once a year it is that little book that seeks to keep the companies in which we have invested honest to us. The content of an annual report is meant to honour the trust the shareholder has reposed in the company, its management and Board of Directors. It should therefore not be taken lightly by either party. Unfortunately, there are some companies who could care less about the annual report, to them it is just another unnecessary burdensome requirement. To some shareholders it is just more unnecessary reading material.

The annual report is a performance document and as such it should, among other objectives, give a snap shot of the company’s activities over the preceding financial year and, as well as quarterly financial reports it is a significant disclosure requirement of stock exchanges for their listed companies. As a document reporting on performance it should be a love-letter to shareholders setting out why we the shareholders should remain in love with you, the company, for another year.

Why shouldn’t we sell our shares and buy those of another company? What have you done for us lately and where are you planning to take us next year? Are you remaining profitable and is your bottom-line still hot? Or do you have so much receivables that you have to hide them knee-deep in the Notes Pages? The book should remind us why we invested in the company in the first place and make us feel aligned to the company and its goals. It should woo us and yet remain authentic. Not like our local Jamaican Lotharios, many of whom are long on the right words but woefully short on cash.

As a love-letter it should be written in simple language that most of us can understand. The format in which it is presented is also important. Some companies do not believe it its efficacy so they pay it as little attention as possible and give it and by extension their shareholders’ the contempt they think we deserve. Over the past few months I have received some of annual reports on cds – that is all well and good for me as I have access to a computer but what about those shareholders who do not have computer access, are they given a choice of hard copy over cds so that can they still read your ‘love-letter? My friend’s seventy-five year old father has shares in several companies but he does not have computer access. Should he be denied the right to see how the money he has invested in your company has performed? Does this register of the company’s caring meter?

On the other hand, I find it amazing that there are people who would actually part with their cold, hard cash to become part owners in a company and not be the least bit intrigued in what said company is doing with their ‘little much’. Some shareholders don’t seem even remotely interested in the quality of managers, board of directors and CEOs who make decisions about how the company they have invested in is run. They take the executives off the hook and give them carte blanche to do as they please. No questions asked. Enquire if they have ever attended an Annual General Meeting and they will look at you in askance.

Now, I am no by no means a penny-pinching Mr. Krabs but I certainly want to be a little more than curious about what happens to the money I chose to invest in XYB Limited rather than buy a Louis Vuitton handbag or a pair of Jimmy Choos, if such was my taste. At least with the handbag and shoes at the end of the day I have something to hold in my hand tattered though they might be. I am also a little more than anxious about the track record about Mr. Big CEO. He does not have to have a Harvard MBA because I am not too persnickety but the little things I would want to know is if the CEO has shown that he has in the past run a successful business, is not on anyone’s ‘most wanted’ list nor has been resident in the ‘big house’ at any point of his career.

Some of the more important questions that the annual report should seek to answer include: has the company remained profitable; what is my CEO’s vision; what does the company believe in; how is top management preparing and responding to industry changes; how are the employees treated? Will I be proud to say I own shares in XYB Ltd. If you love letter isn’t answering these questions, perhaps it is time find a new lover.

Yvonne Grinam-Nicholson, (MBA, ABC) is a Business Communications Consultant with ROCommunications Jamaica, specializing in business communications and financial publications. She can be contacted at: yvonne@rocommunications.com. Visit her website at www.rocommunications.com and post your comments.