firm advising clients on regulatory disclosure, transparency and getting digitally fit for the future, corporate reporting is a major focus for PwC.
Having produced a traditional print and pdf annual report for several years, this week we published something decidedly different. For the first time, we’ve released our annual report solely in a digital format.
Why have we done this? We, like many businesses, have been looking at how we can present annual report content in innovative ways and yet we have struggled to dispense with “the document” itself until now.
The financial statements within annual reports and accounts may lend themselves to neat tables in formal documents.
However, the narrative parts of annual reports often fail to bring business performance, strategy and risks to life. Readers of annual reports want more than walls of text broken up from time to time with some nice pictures of employees and a few helpful diagrams.
In our report, we sought to create something more accessible and interactive, while still providing our clients, regulators, our people and potential recruits with the information and data they need to understand our purpose and strategy as a firm.
In a digital age, experimenting with this type of presentation seems an obvious step. It plays to the technology available and the ways people want to consume information and, of course, there is a sustainability benefit to not producing paper copies.
But while partnerships like PwC can do it, listed companies are unable to and the reason is that it would be illegal.
Companies are required to file their annual reports and accounts, including all of the narrative disclosures, with Companies House, and this is where the challenge begins.
The Registrar of Companies has a set of filing rules which would have been perfect for when the registration of companies first began – in 1844.
Clear instructions tell us that “Companies House does not accept any statutory documents by pdf or by email” and “…paper documents should be on A4 size, plain white paper with a matt finish. The text should be black, clear, legible and of uniform density.”
Given our narrative reporting requirements are less prescriptive than those prepared by major listed corporates, we are fortunate to have more room to experiment and test our narrative reporting. For now, though, digital presentations that are used as a basis of “public record” are out of the question for corporates.
As investors and regulators demand ever greater insight and information, pushing the reporting agenda forward is important.
For example, instead of reading about an Audit Committee’s consideration of significant accounting issues, and how they responded, watching and listening to the chair of an Audit Committee explaining in detail is likely to give greater insight.
Of course, companies can go ahead and produce separate “digital assets” alongside the filed documents but these are likely to be duplicative, and yet we know the way information is being consumed is being transformed. There is surely an opportunity for formal filing of annual reports and accounts to embrace the digital age.
Our annual report is a starting point. It’s an attempt to kick off a debate, which is why we want feedback and discussion, whatever your view.