“Regulation was our only choice,” says Mark Jackson, senior policy advisor or the Department of Business, Innovation and Skills (BIS) in regards to the recent requirements placed on corporate reporting. Next, BIS plans to tackle human rights reporting. These regulations has both responded to and led the vanguard in an evolutionary stage in the life of the annual report.

The Evolution of the Annual Report conference, held on 2 October in London, featured a laundry list of headline speakers in corporate reporting from the executive director of the Financial Reporting Council to the director of group communications at Legal & General and the director of investor relations for the National Grid.

Speakers discussed the ways in which investor relations and corporate reporting have changed due to shifts in technology, new national and international regulation and the changing needs of investors. “The way people read reports is changing,” Premier Farnell’s IR executive Thomas Churchill says, setting the tone for the day’s discussion which largely focused on why reporting is changing and the role the audience has played in ensuring that evolution.

“The quality of the annual report reflects on the quality of the people running the business,” adds Freddie Wolfe, associate director of investment management firm Hermes EOS. “You can tell when companies view the report as a communications document rather than a compliance piece.”

Investors are no longer the only ones reading annual reports, however. Thus, narrative reporting has become de rigueur as companies seek to tell their stories, rather than just present financial details. Financial journalist Andrew Sawers says the annual report is the only place companies can have that conversation with their stakeholders. Regulation, he says, is catching up to the trend toward discussion of risk and corporate story in the annual report.

While the environment in which reports are being read, and by whom, has changed, so too has the mode of delivery. Digital has changed the way corporate reporting functions, on a fundamental level. Almost all listed companies have some digital aspect to their annual report, whether that’s a PDF version, a full HTML site or a bespoke website. International mining firm Rio Tinto launched an online portal for corporate reporting that allows them to constantly update data and information. Marina Plessas, principal adviser for digital media at Rio Tinto says, “It was our choice to use this as a communications tool in a way we hadn’t before. It’s all about the downloads now.”

Though the last few years have been rife with change, the evolution of the annual report doesn’t end there. Speakers discussed the changes yet to be made in both regulation and stakeholders demands. Digital will continue to act as a force for change in corporate reporting, but many point to risk and reputation as the next step in the growth of the annual report. Melanie McLaren, executive director for the Financial Reporting Council, says the FRC will work towards enhanced risk management reporting in future. John Dawson from the National Grid shocked attendees when he suggested the annual report should no longer be ‘annual.’ “Why can’t we have a strategic report when we have a strategic change?” he asks. An annual look at a business ignores the constant change that investors may be looking for. That may be more revolution than evolution, but only time will tell.

The Evolution of the Annual Report conference also featured the distribution of the Strategic Report Accolades. The awards, presented by FutureValue are given to UK listed companies for the quality of specific strategy-related content in their 2013-14 strategic reports. Winners are judged on seven criteria. Winners are announced below, along with the shortlisted companies.

1. Strategic leadership


This accolade acknowledges the company or group that shows the greatest clarity and rigour in its published strategic thinking with a well-articulated, integrated strategic framework to illustrate clearly where it has been; where it is now; where it is going; and, how it will get there. This is the supreme accolade of the year.

• Fresnillo
• 
Land Securities Group
• 
Lloyds Banking Group
• 
Marks & Spencer
• 
Rexam

• Unilever
 

Winner – Lloyds Banking Group

2. Best business model


This accolade recognises the most effective exposition of a company or group's business model. The business model is the foundation of the strategic framework, defining the logic of the business and the basis of sustainable profitability across the value system of its enterprise. A well-defined business model leads to clear and consistent corporate goals, objectives and strategy.

• British American Tobacco
• 
Marks and Spencer Group
• 
Provident Financial
• 
Rexam  

Winner – Provident Financial

3. Best key performance indicators


This accolade recognises the company that declares the most effective set of KPIs. Effective strategy is about the past and the present as well as the future. Of crucial importance in this are the metrics that measure operational performance to provide Executives and Board with an effective means to monitor performance against strategy.

• ARM Holdings
• 
Balfour Beatty

• Fresnillo
• 
Halma
• 
ITV

Winner – ARM Holdings

4. Best strategic risk


This accolade acknowledges the company that is most effective in revealing its sensitivity to its future through the presentation of risks and uncertainties that may influence achievement of its declared goals and objectives. Good strategic risk reporting also explains risk appetite, risk governance and risk management processes as well as specific factors.

• Fresnillo

• Land Securities Group
• 
Legal and General Group
• 
TUI Travel

Winner – Fresnillo
 

5. Best strategic capability


This accolade rewards the company most effective in showing its continuing investment in the strengths and resources essential to its growth and sustained success. Companies that think strategically know that it is important to show in their annual reports how persistent investment in these hidden assets is fundamental to their continuing success.

• Coca-Cola HBC
• 
Lloyds Banking Group

• Marks & Spencer
• 
Unilever

Winner – Marks & Spencer

6. Best shared strategic value
This sixth accolade is for the company that has been best able to show in its annual report how it integrates its approach to social and environmental matters into its overall strategy for the business to share value with all. Shared strategic value is about the fundamental sustainability of a business to the advantage and benefit of all its stakeholders.

• Anglo American

• Coca-Cola HBC

• Lloyds Banking Group

• Unilever

Winner – Coca-Cola HBC