It almost goes without saying that, as the Company Secretary, you and your fellow Annual Report authors will need to attend all the usual year-end seminars put on by lawyers and others in the marketplace to understand hot topics, themes, new regulation coming around the corner and all updates needed to your Annual Report. This must happen before you start working from your updated check lists to draft and update the various sections. In this way you will ensure that all required disclosures are included, and all best practice disclosures considered.
In this article, we are going to focus on how you can project manage the process effectively for the best results.
The purpose of the Annual Report document
The Annual Report is multi-purpose and much of the content is mandatory under company law and other regulation depending on your size and whether your company is listed. There is also the opportunity to tell your story and weave this in throughout the document. Working closely with your senior management, Board, and Investor Relations colleagues you can ensure that strategic priorities for the future and achievements in the year are kept front and centre and the reader comes away with a real flavour of where you have been and where you are going as an organisation. Ideally you will want to build on a story that you have been telling over the last couple of years.
Planning makes perfect when it comes to your Annual Report planning
This is one of the biggest jobs in the company secretary and governance year and, like so many things, benefits from as much forward planning as possible to make sure you pick up things from last year that could have gone better and anticipate any challenges this year. Get meetings in early with authors and designers to start the thought process and to establish key visual themes.
Just after the AGM can be a good planning starting point. Given that you have just held the AGM, things will be fresh in the team’s minds, and you can start the process of mapping out what is needed for next year. Questions to ask yourselves as a team are:
- What went well?
- What did not go so well?
- Did we have the right people on the team?
- Did some authors need support which we can give upfront this time?
- Did we have sufficient resource?
- Do we need added support and who from?
- Were our messages understood?
- What was the feedback from our investors?
- What was the feedback from the Board?
- What is our chosen AGM date so we can work back to produce the timetable?
Add this project review date to this year’s timetable (see below) so it is already in the diary. Start early!
The Annual Report budget
It is not always clear who holds the budget, and it can easily be forgotten how much over the budget you went last year once you have moved on from last year’s Annual Report. Check where the budget sits within the business and make sure all aspects of the budget are transparent e.g. photos may sit elsewhere in another cost centre. Get those proposals from last year out again, check them against the actual invoice and overruns. Learn from the exercise to inform the proof process and timetable this year.
First steps for planning and getting buy-in for your Annual Report
Agree who the core team are as a first step and make sure you schedule in regular meetings from that very first review of last year’s project to the post-AGM filings to ensure that things are on-track.
Start a document which captures changes which will need to be explained in the Annual Report. You can keep adding to this throughout the year as they occur, and it will act as a great starting point for your drafting.
Can you pin down the key messages from the outset to help with drafting the Annual Report? Understanding your audience is part of this process. This may not be easy for smaller listed AIM and FTSE companies where change can be very rapid but you need to understand your key stakeholders and who will be reading these messages so you know how they should be presented. The messages need to flow through and be consistent throughout the Annual Report and knowing your messages early means that you can ensure that everyone who is involved in drafting understands what is expected from them and can build in those messages. This includes anyone supporting you such as designers, PR Agents, any investor relations team etc.
Before even starting on the drafting, an internal workshop can be valuable for authors/content providers. You could consider inviting your Annual Report designers or bring them in beforehand in preparation to help you with the agenda or afterwards when you de-brief. Some authors will be new and have never carried out this task before so will need some guidance, especially on getting the same voice throughout the document, despite have multiple authors. A style guide will aid with this, ensuring that all authors use the same references and style. Making sure all the right people are at your workshop needs some work before the actual day to ensure full buy-in.
Your designer may use specific software to manage the proofs too, so get training in early for those who need it.
It is worth having a look at the Annual Reports of some of your competitors and peers in your sector and beyond. There are many examples of best practice Annual Reports. In fact, there are awards that celebrate outstanding Annual Reports like the CGI Awards – and you can get an idea of what good looks like and what could be useful for your own Annual Report, from these. The FRC also publishes an Annual Report highlighting excellent Annual Reports.
Discussions with your designer on design – will you evolve last year’s design or is there an appetite from management to start afresh? This discussion should take place early on followed by a meeting to present the ideas to the Board and senior management. There are many design aspects that can help with the flow of the document so that it all looks joined up and your designers can advise on this aspect and the ideal structure of the Annual Report for your business and its needs. Make sure that it is agreed which directors and senior management can give the go ahead on the chosen design and direction. Having too many individuals involved can lead to mixed views and inertia, resulting in you not being able to move forward with an agreed design. This could hold up the timetable.
Timetabling your Annual Report
This is always controversial as it is difficult to keep everyone to time but agree this upfront at your workshop and make sure internal audit and external audit are engaged and in agreement as to what they want to review and when. Make sure this works for you and negotiate. It is your document, and they are inputting not driving the timetable.
The usual process will be that the Board reviews a nearly final proof and then agrees to appoint a subcommittee to give approval and sign off on the final document and results announcement a few days later. This needs to be managed carefully with the subcommittee meeting outside of business hours if you are a listed company so that any inside information contained in the Annual Report is published at once after approval.
Proofing your Annual Report
Again, this can be stressful. Try not to have too many proofs and make sure you have an agreed process for who will update the proofs and in what format. PDFs marked up in manuscript mean that you and the typesetter do not have to manage many different mark ups but there are different ways of managing this and its best to talk to your designer, to understand their preference.
Keep the bigger picture in mind
There is a lot to consider at once. You will need to look at consistency, grammar, typos, and tone and whether the document is “clear, concise and accurate” across the whole document at various stages of the process.
Look ahead at least a couple of weeks as you manage the timetable with your core team to check all is on track and deal with any bumps in the road that occur.
Continue to horizon scan, to check there are not any last-minute changes that will need to be incorporated such as post balance sheet events or from a regulatory perspective.
Photos to include in your Annual Report
This needs to be built in early on in your timetable including approval points and it may be that you even need to help manage a photo shoot if you have sites that will feature in the Annual Report. You may have to work with your Marketing team to source existing imagery or ask them to source anything additional needed.
Key updates for the 2024/25 Annual Report season
Whilst this article focuses on effective project management of an Annual Report, here are a few of the areas to be mindful of when drafting your Annual Report:
- New UK Sustainability Reporting Standards (based on international ones which came in June 2023)
- Market focus on cyber and AI
- Diversity and inclusion at Board level and within the wider workforce with optional targets under Parker to consider setting
- Succession planning
- Reviewing the effectiveness of your Board
- Culture and purpose
- Preparation for material controls assurance
Mailing your Annual Report
The Annual Report is linked to the AGM and as the Notice of AGM will typically be incorporated into the Annual Report or sent along with it, you will need to make sure your mailing timetable gives enough notice of the AGM under the Companies Act and Code Guidance requirements. It is also important to build into your timetable liaison with the Company’s Registrar. The mailing house will also need to be brought in at the right time to ensure that all shareholder data, including any email addresses for web communication, are ready in advance of the timetabled mailing date for the Annual Report.
Tagging and filing your Annual Report
Plan the tagging early if this applies to your company and make sure it is clear who is responsible internally so you are ready to go and can upload both untagged and tagged accounts to the National Storage Mechanism if this applies to you. Companies often use an external provider.
Filing the Accounts at Companies House must not be forgotten, and companies have different policies about the timing for this, bearing in mind the overall deadline of course, so make sure this is a clear step in your timetable, along with getting the Accounts on your website, checking they are accessible by users and having hard copies printed.
Digitising your Annual Report
If you have the budget and inclination, it is possible to improve the digital experience for website users so that the Annual Report is much more interactive, and information can be accessed more quickly via AI tools rather than trying to navigate manually through the Annual Report. Website designers need to be well-primed to upload the Accounts at exactly the right time too.
Governance Code transition
With new Corporate Governance Codes having been introduced in 2024 (QCA Corporate Governance Code for AIM companies and, for FTSE companies, the UK Corporate Governance Code) companies will need to transition reporting against them through the next couple of Annual Reports and, this year, draft disclosures which explain the journey they are on. Keep this on your Board agenda to gain maximum buy-in; as to how and when you will address the changes needed or agree not to comply and explain.
The Annual Report is a big task, but it’s achievable
In summary, the Annual Report process has its challenges. Yet, with robust planning, close monitoring of the plan, excellent stakeholder engagement skills and a designer and printer you can rely on, you can be sure of a successful Annual Report!