A huge step organizations have taken in the direction of openness is posting financial information online (government agencies are even required to post financial reports online now). What better way to be transparent to current and potential shareholders than post the financial strategies and reports online?
In the days of Web 1.0, organizations just posted the print version of their annual reports on their websites. With the advent of Web 2.0, industries need to take their investor relations a step further and create interactive annual reports.
An interactive annual report doesn’t just include financial information in new, digital formats, but also includes the traditional print materials as well. IBM’s 2008 annual report is a great example of an interactive annual report, complete with multimedia.
The Interactive Annual Report Company, based out of the U.K., is a company devoted to building annual reports in multimedia formats for other organizations. An annual report developed by the Interactive Annual Report Company includes a video letter to shareholders from the CEO or Chairman, video case studies, interactive click-through financial charts, as well as downloadable print formats.
However, the annual report also includes a small, pocketsize booklet of the annual report in print format. The booklet has colorful graphics and investors can carry it around anywhere.
Take a look at the video below. Dave Werner has created a multimedia annual report for Brinker International.
Many companies have only taken the first step to transparent investor relations with key publics. Posting annual reports in PDF format on corporate websites won’t foster the trusting relationship that an interactive report may. Current and potential shareholders might trust a company more if they’ve seen a video statement from the CEO, have easy access to a decade worth of financials all on one page, or can link to the corporate investors’ blog from the annual report (check out Dell’s investor blog to see an example).
Though interactive financial reports require extra time and money, the resulting investor relationship could make up for the funds taken from the bottom line anyways.
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March 27, 2009 at 7:17 pm
Nicole Fiorella
Hey Lindsey,
This is really interesting. I was extremely excited to learn about this since my blog is on interactivity, too. I tihnk the idea of interactive annual reports is really key for investors to trust a company and feel comfortable to invest in them, especially with the current stockmarket situations.
The IBM Annual Report is really informative. I think it really shows how willing the company is to being transparent with its stakeholders. I also took a look at Sun Microsystems Annual Repot, and they included even more infromation than IBM.
Sun Microsystems provided their financial information and committee memebers names, but they also provided links to their company policies. A few of these policies include how they go about giving employee compensation and the factors that apply to receiving it. There is also information about proposals that suggest new ways to elect the board of directors and even suggestions of ways to ammend policies.
I found their report to be very insightful and thought you might want to check it out, too. The link is https://materials.proxyvote.com/Approved/866810/20080924/CMBO_27948/HTML2/default.htm
March 27, 2009 at 7:41 pm
Sarah Lokitis
This idea of interactive financial reporting makes me think of the social media newsroom. Each journalist has their own way they like to receive information and posting all different types of formats makes it easier to find the news they are looking for. It seems to me that interactive financial reporting works the same way, so investors can easily watch their company and either use the print format or an interactive format. I agree that with all the new technology we are dealing with, only posting the regular print format does not use the advanced technology and applications we are capable of in the new world of web 2.0.
I found a blog article citing the Security and Exchange Commissions new policy for interactive data in financial reporting. According to this article I listed below, large companies must publish an interactive quarterly report after June 15, 2009. Companies will be changing their set up to reflect interactive reports such as the IBM report you cited. [http://www.corporate-eye.com/2009/01/interactive-data-for-financial-reporting-and-ir/]
April 1, 2009 at 4:45 am
Lindsey Monroe
Sarah,
Thanks so much for the input. I think I will add that tid bit of information into my post as well.
Also, it’s funny you bring up the social media newsroom. Keep reading this week’s posts and you may find that you read my mind on subjects of transparency. Social media newsrooms are the next place for an organization to expand its openness.