Not so long ago, a company report all too often meant a thick, unappealing tome, a largely uninspiring document that was absorbed and understood by only the most conscientious and dedicated of investors and employees. In the digital age, however, the world of corporate reporting is changing rapidly. Already, in the United Kingdom and the United States, companies are able to use the internet as their default medium for reporting.

Technology has made snore-inducing reports and difficult-to-digest information more user-friendly and accessible, with video and audio making information more attractive and compelling. These days, it’s not uncommon for annual reports to appear on YouTube, and this includes companies from telecommunication heavyweights such as Siemens and Motorola to food and beverage companies like California Pizza Kitchen and Ruth’s Chris Steak House. With some less than five minutes long, they are manageable watching for those with even the shortest of attention spans and a chance for investors to get up close and personal with CEOs and MDs.

One of the most significant developments to occur in the corporate reporting world was the formation of multi-stakeholder group Report Leadership (www.reportleadership.com) in 2006 by the Chartered Institute of Management Accountants (CIMA), PricewaterhouseCoopers (PWC), and UK corporate and business communications firm Radley Yeldar. As early as 2007, the group highlighted the importance of digital media in its report titled Online Reporting: Practical Proposals for Reporting Corporate Performance Online.

Noting that many companies were doing little more than putting their print reports on the internet, the report stressed the need to welcome the web’s capabilities and think about investors’ demands. Recommendations to achieving this include using “skiplinks”, so users can skip over repetitive elements; marking pages with bookmarks on the side of the screen; and enabling investors to print out a copy of the report with their added comments.

Radley Yeldar, whose clients include Lloyds Bank and Rolls Royce, has taken an active role to enhance internal reporting. Clive Bidwell, Head of Corporate Reporting, says: “Our clients view corporate reporting as an essential part of their key communication strategy and they are particularly concerned about transparency and compliance.”

He explains that the best corporate reports get better year-on-year by addressing new reporting requirements – such as the inclusion of information on environmental, employment, social and community issues – without being distracted by an obsession with content and tick box reporting. Their focus remains on communicating a cohesive, accessible story to their stakeholders. Bidwell cites Capita, a leading UK outsourcing company, and PartyGaming, the world’s leading, listed online gaming company, as good examples (http://www.capitareport2008.co.uk/ & http://annualreport2008.partygaming.com/).

David Philips, Senior Corporate Reporting Partner for Pricewaterhousecoopers, says that while the feedback Report Leadership has received from investors and companies has been positive with the hundred group of CFOs, comprising the FTSE 100 companies, he also admits there is plenty of opportunity for companies to improve their reporting.

“Before you focus on external reporting, you have to fix the critical moving parts internally – does the internal story hang together and reflect the reality of what’s happening on the ground? In doing this, the board needs to take the lead, and set the tone, expectation and ambition,” says Philips.

Bidwell adds, “you need to start with your story – the points you want to communicate – and not with a reporting rule book. After that, it’s about planning that story in a cohesive way, with all elements interconnected.”

He explains that reports tend to get bigger every year in response to increasing requirements. While this meets legal needs, it can actually do a disservice by steering a company’s focus away from their story and more towards meeting regulatory requirements. The increasing complexity and decreasing relevance of reports was perhaps best summed up by the Financial Reporting Council’s Louder than words paper published in June 2009, which urged companies to “cut the clutter”.

Philips stresses that it all comes back to the idea of making your reports more than just a check in a regulatory tick box. By embracing financial reports as a way to tell your company’s story, outline its strategy and connect with investors, you have the “ability of reinforcing what investors suspect, that certain companies are well run and therefore more likely to be successful in the long run.” When a company’s financial reports clearly lay out their strategy, linking it to the other information provided, it resonates very well with stakeholders: “If you get it right, it assists in raising capital, recruiting people and building meaningful business relationships.”