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IR Guide June 2010
1. GUIDE
June 2010
The annual report:
many ways to
tell your story
The role of the annual report
Picking the right format
Engaging new audiences
2. Purposeful
Contents design
W
Purposeful design hen Arthur ‘Art’ through phone calls. But it felt the
Ensuring your message
Keeney stood annual report provided the best
gets across
page 2 down as president place to make a lasting statement
and CEO of East Carolina Bank about the company’s future direction.
Tailored message (ECB), the company wanted to ‘It takes all the strategic initiatives
Choosing a format to
set out its vision for the future. we do and gathers them under one
suit your company
page 4 Keeney had been at the helm umbrella,’ says Runion.
of ECB for more than 14 years,
Modern audiences
overseeing a period of strong, Numerous options,
The impact of social
media and CR profitable growth. Following his one aim
page 6 departure, the company wished to For its 2009 annual report, ECB
reassure investors that the growth produced a 10K wrap, including a
Sponsor’s statement
page 8 and stability of the Keeney years mission statement, the two share-
would continue. holders’ letters and three editorial
ECB chose to make this reas- spreads focused, respectively, on
suring statement in the annual customers, employees and sustainable
report. ‘In our report, we did two growth. The bank also produced a
shareholder letters: one from Art, separate print run of just the wrap
and another from the new president,’ section, which it gave to its
explains Lorie Runion, ECB’s sales teams to use as additional
chief administrative officer. ‘The marketing material.
second letter took a strategic There are, of course, many
focus. It described how ECB has ways to deliver the annual report,
been a great organization and this including the traditional print an-
is where we are heading.We felt it nual report, the summary annual
was a really important story to tell report, the 10K wrap and the 10K
our shareholders.’ only, as well as online options,
As you might expect, ECB also such as the online HTML report
made this point in press releases and the downloadable PDF.
and interviews, on its website and Some produce a separate cor-
2 IR GUIDE The annual report: many ways to tell your story
3. WMS Industries produced a
traditional print annual report
porate responsibility (CR) report the buy side still
to supplement the main document. holds the annual
Different formats and styles will report in high
suit different companies; there is regard. Market data
no single way to communicate provider Rivel Re-
every company’s message. search conducts detailed
What’s important to recognize telephone interviews with
is the opportunity the annual investors. In its most
report affords. It offers the chance recent survey, released in
to pull together all the different July 2009, it finds 70 percent
strands of a company’s message in of respondents think the
one document, and gives investors annual report is useful when
a clear idea about why they should making the decision to buy a
invest in your company. stock. In addition, 69 percent of
As a result, it’s not surprising buy-side respondents say the
annual report is useful for helping
Noise reduction them follow a stock once it is in
Long-term investors are always trying to block out ‘noise’, by their portfolio.
which they mean the factors that move the market on a day- ‘The annual report is a document
to-day basis: market rumors, momentum trading and PR that retains a great deal of
disasters. Such factors distract from the fundamental strengths credibility,’ concurs Bill Pfund,
(or weaknesses) of a stock that are borne out over time. vice president of investor relations
‘We use a variety of electronic media to get our message at WMS Industries, the gaming
across, such as press releases and a YouTube account,’ com- company. ‘It has a set of audited
ments Bill Pfund, vice president of IR at WMS Industries. financial statements. It has the
‘In those channels, however, the balance is tilted toward chief executive’s letter. If used
immediacy and the facts. The annual report gives you the properly, it is an opportunity to
opportunity to balance that with a greater perspective cov- share a greater perspective regarding
ering the direction of the company.’ the company and the industry in
which it operates.’ ●
The annual report: many ways to tell your story IR GUIDE 3
4. Tailored
message
S
o what kind of annual and feel annual reports.’
report is right for your Lee doesn’t believe the printed
company? It’s a complicated annual report is going away any
question and the answer will be time soon. ‘I don’t think that will
The hard copy different for each firm. But it’s happen in my world,’ she says.
annual and HTML worth bearing in mind that most ‘The older investors like to sit
report both have companies still produce some down with the report and read it
their merits kind of hard copy annual. from cover to cover.’
with investors NIRI’s most recent annual
report survey, conducted in 2008, Disappearing act
finds 91 percent of respondents Engaging with individual share-
produce either a 10K wrap, a holders is particularly vital today,
summary report or the traditional after two years of regulatory
annual report. Of those printing changes that threaten retail
an annual report, the most popular participation at the annual meeting.
format is the 10K wrap, with 53 There is evidence to suggest
percent selecting this option. notice and access has reduced the
The printed document is retail vote since its introduction in
particularly important for connecting 2007, while this year’s change to
with your retail shareholder base, Rule 452, eliminating the broker
says Robbin Lee, vice president of vote during directors’ elections,
IR at ProLogis, the global provider should push retail vote levels even
of distribution facilities. lower. Issuers need to do whatever
‘The majority of our share- they can to boost retail interest in
holder base is made up of institutions, their stock, and an engaging
but we have around 65,000 annual report is one of the best
individual shareholders,’ she explains. tools available for this task.
‘These tend to be older individuals This year, ProLogis produced
who own ProLogis as a yield play, a 10K wrap and, like ECB, printed
and they like to be able to touch a separate run of the 16-page
4 IR GUIDE The annual report: many ways to tell your story
5. ProLogis produced a 10K wrap, HTML
report and online-only CR report to cater
to its different stakeholders
front segment to help employees
dealing with customers who lease
its facilities.
The company also produced
an HTML version of the report
for its corporate website and a
separate, online-only CR report.
Lee says the HTML report is useful
for professional investors and have a short attention span and
analysts who tend to prefer the an urgent need for immediate
quick access to information afforded gratification,’ she explains. ‘This out can take a couple of days.’
by the internet. can be solved by giving them the Whichever method you
‘Professional investors tend to HTML version, because mailing choose, there is a cost-benefit
analysis that makes the case for
Reinvesting print savings companies to produce an annual
Notice and access is still evolving. Only the bigger companies report, according to Curran &
have signed up en masse, as they have more to save from Connors. Consider a client with
reducing larger print runs. Figures from Broadridge tracking 50 mn shares outstanding and a
notice and access adoption between July 1, 2009 and March $100,000 budget for its annual
31, 2010 show only 29 percent of eligible companies had report. In this instance, the annual
used the new option. report would cost the company
As there is evidence to suggest notice and access less than $0.002 a share.
reduces retail interest, one option is to reinvest at least Now imagine the company’s
some of the print run savings in an online annual report. share price increases by one penny
One company doing just that is ProLogis. ‘Do we make any as a result of the communication
savings from notice and access? Dollar for dollar, it’s probably provided in the annual report.
a wash because we spend a little more money designing the This would result in total return
HTML online report,’ says Robbin Lee, vice president of to shareholders of 400 percent.
investor relations at ProLogis. That’s money well spent, says
Curran & Connors. ●
The annual report: many ways to tell your story IR GUIDE 5
6. Modern
audiences
T
witter users send, at new documents that have been
the last count, posted to the website. Others are
around 55 mn tweets taking a more engaged approach
a day, and that figure is rising by conducting conversations with
sharply. But the advance of stakeholders through the site.
Social media networks social media does not It is worth noting that every
and CR are changing mean traditional forms one of the millions of tweets sent
the way annual reports of communication, like each day is now being stored by
are consumed the annual report, should the US Library of Congress. This
be sidelined. On the serves as a reminder to everyone
contrary, social media that anything posted to the internet
networks can enhance the is there to stay.
value of your annual report. While the web offers instanta-
Issuers are now posting their neous access to a wealth of
reports to websites like Docstoc, information, it also acts as a
where the documents can be massive storage bank that makes
viewed, shared and commented material available ad infinitum.
on. Docstoc has an annual report That means extra care must be
section containing more than taken over whatever appears
1,600 items and its most viewed online, including shareholder
item – Chesapeake Energy communications like the annual report.
Corporation’s 2006 report – has
clocked up more than 14,000 Earthly concerns
views on the site. By uploading For many investors – both
documents, issuers can take professional and retail – the effort
control of the way they are companies put in to protect the
portrayed on social media networks. environment is becoming a greater
Twitter feeds are also being and greater concern. In turn, the
used by corporates to spread their focus on sustainability has resulted
message, mainly as a way to flag in a rise in the number of investors
6 IR GUIDE The annual report: many ways to tell your story
7. Kellogg’s produced its
second CR report this year
in the US focused on corporate
responsibility, says Lee.
To highlight its sustainable
approach to business, ProLogis
continues to provide an online-
only CR report, which this year
was released on Earth Day (April
22).The report helps raise awareness
about the company’s programs
supporting CR. ‘The CR report
makes it very easy to access all the
information that’s very important
to CR investors,’ notes Lee. ‘It Corporate Office
helps them decide whether we fit Properties Trust
into their investment profiles.’ developed a video
ProLogis is not alone. Corpo- report starring its
rateRegister.com, a website that management team
stores and reviews CR reports,
says 3,764 stand-alone reports
were produced in 2009 globally, emphasize Kellogg’s focus on
up from 3,408 in 2008 and 3,011 sustainability from the top down.
the year before. In general, the CR report
This year, breakfast cereal complements the content in the
producer Kellogg’s delivered its traditional annual report, which
second CR report, which is available has the wider aim of making a
in HTML, PDF and print formats. lasting and comprehensive statement important stakeholders for whom
The report features interviews about a company’s operations, we believe the annual report
with David Mackay, president and finances and strategy. remains an important part of
chief executive, and John Bryant, ‘Shareholders, employees, our communications strategy,’
chief operating officer, in order to suppliers and regulators are all concludes Pfund. ●
The annual report: many ways to tell your story IR GUIDE 7
8. Sponsor’s
statement
Offices
Atlanta, GA
Boston, MA
Brentwood, CA
O ver the past four decades, Curran & Connors has
evolved beyond its core capability – annual report
design and production – to meet the challenges of
a continually changing corporate environment.
Our ongoing evolution translates into greater creative
Charlotte, NC
capacity, enhanced design solutions, cutting-edge web services
Chicago, IL
and better results for you. With design studios in New York,
Cleveland, OH
Chicago, Florida and California, and account executives across
Dallas, TX
the country, we continue to offer an unparalleled range of
Denver, CO talent, coupled with knowledgeable local representation, to
Fort Lauderdale, FL create enduring connections for our clients.
Hauppauge, NY
Houston, TX
Los Angeles, CA
New York, NY
Princeton, NJ
San Francisco, CA
Washington, DC
For more information:
Noah Butensky
Phone: +1 631 435 0400
Fax: +1 631 435 0422
nbutensky@curran-connors.com
www.curran-connors.com
8 IR GUIDE The annual report: many ways to tell your story