For many companies, this year’s annual report will feel something like a victory lap.
The stock market’s bull run has become a stampede, smashing record highs time and again. As of this writing the S&P 500 Index is up 19 percent year to date, with strong returns rippling across most sectors.
Barring any last-minute calamity, most annual reports will come bearing good—if not great—news for shareholders.
Of course, amid the investor euphoria, it might be tempting to view this year’s report as a slam dunk. Roll out the great news, sprinkle in a few notes of caution about the future unknown, and call it a day.
Yet positioning an annual report for a good year can be every bit as challenging as doing so after a year when your shareholders got clobbered. It’s essential to be thoughtful and strategic, both in advising your leaders and executing the report itself.
Here are 10 things to think about as you consider how to tell the story of a banner year:
1. This one will get read. Everyone likes a winner, and it’s likely your shareholders will be basking in the glow of solid returns when your annual report arrives. Unlike tough years, when some shareholders’ first instinct might be to pitch the report in the circular file, many will be eager to dig into the breakdown of what led to your success and how you aim to maintain it. Make sure every aspect of your 2017 report shines and that the content reflects your strength, showcases your management team and reminds shareholders why they invested in your company in the first place.
2. Don’t go overboard on your theme. The tricky thing about annual reports is that they typically come out well into the new year, when the economic landscape can be decidedly different. So instead of rolling out the “Mission Accomplished” banner, consider highlighting your momentum and strengths, rather than focusing only on great results.
3. Be true to your voice. Analysts and serious investors love nothing more than consistency. Keep that in mind when framing the approach and messaging of your report. Although it’s OK to highlight great performance, make sure the tone rings true with how your leaders have talked about your company on quarterly calls and throughout the year.
4. Play up the good news. Don’t be afraid to tout your success, but do so in an authentic way that acknowledges the benefits of a sound economy and unprecedented stock market.
5. Don’t bury the bad news. With strong results making headlines, the temptation will be to ignore or gloss over any significant challenges that may have affected the business in 2017. Resist it. Acknowledge the hurdles and missteps, and make clear how you will address them in the future. Your shareholders and analysts will appreciate your candor, and you will benefit from the cover of strong overall performance.
6. Focus on what sets you apart. Michael Scott, the blundering boss on “The Office,” could have run a company this year and shown positive gains. Well, that may be a stretch, but it’s essential to highlight actions you took to differentiate from your competitors and how those actions made a good year even better.
7. Show you’re playing the long game. The phrase, “Past results are not an indicator of future performance,” is never far from a savvy investor’s mind. Smart companies always prepare for rain, even when it seems that the sun will never stop shining. Highlight the proactive moves you have made to thrive—or at least limit the pain—in any economic conditions.
8. Manage expectations. You don’t want to burst everyone’s balloon, but in the wake of what may well be a once-in-a-lifetime year for stocks, a solid dose of reality is in order. Make sure your CEO’s letter frames realistic expectations of what is ahead.
9. Show you care. A great year offers a prime opportunity to demonstrate how a rising tide lifts all boats. Highlight concrete examples of how you are fulfilling your company’s purpose beyond the bottom line through community involvement and charitable work. Acknowledge the contributions of employees, show appreciation for your customers, and let your shareholders know the ways you are engaged with the communities you serve.
10. Create a report that works all year long. It’s not just shareholders who can benefit from an annual report. Your report highlighting your strong year can be an essential tool for your sales team to share with clients, or with HR to show to prospective hires. It can also serve as the foundation for your content and future marketing efforts. Make sure the report is designed and presented in a way that offers the best ROI.