I’ve recently spent a lot of time reviewing annual reports, mostly from small and medium-sized companies. For a whole host of reasons this has been a disheartening exercise.

One thing that really stands out, though, is companies’ inability to describe their strategy and draw out the links with their key performance indicators, business model, risk and remuneration. Given the low quality of the reports I’ve read, it’s not surprising that the government has put this strategic framework at the heart of its proposals for reforming narrative reporting.

I was going to develop this into a long and detailed post that explained how to do this properly, but I had a much better idea and I’m now writing it up as a white paper for a client. I’ll post it on this site when it’s published, which should be in the next few weeks.

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This sign recently appeared on a gate into Marble Hill Park in Twickenham. We’ll ignore the random capitalisation and pompous phrasing (although they tell us plenty about the mindset of the person who wrote it) and get straight to the heart of why this fails as a piece of copywriting.

Half an answer is worse than none

Our marker-wielding commenter didn’t accept the explanation because the so-called health and safety risk couldn’t be less obvious. It’s a gate. There’s a path and some trees and a few twigs and leaves. Where’s the danger?

By only giving us part of the answer, English Heritage looks officious and evasive. It would be easy to say what the risk was but the sign writer either couldn’t be bothered or the risk didn’t really exist. Both possibilities piss people off.

Good copywriting needs empathy

Here’s the real issue though: what we have here is a failure of imagination. The sign writer didn’t consider the audience, didn’t think about what they would want to know, didn’t empathise. And if you don’t know what your readers want, you’re going to fail, every time.

In one respect, our sign writer is lucky: you don’t always get good feedback when you miss the point. It’s far more likely that your readers will simply shake their heads, then walk away.

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Even Disney makes mistakes

Many of the copywriters I follow on Twitter have been pointing out this story from the BBC, about the importance of spelling to companies’ online credibility.

Spelling is important but it’s only the most basic part of getting your story right.

Really effective writing – online or in print – is based on a deep understanding of what your readers want. It informs them but it also connects with them emotionally, so they want to buy from you, or invest in your company, or apply for a job or whatever else it is you want them to do.

This takes skill and experience, often honed over many years. If companies are using people who can’t even spell, what hope do they have of getting the rest of it right?

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Corporate governance continues to evolve but the way companies report it does not.

The directors’ report, the corporate governance statement and the remuneration report all lend themselves to a box-ticking approach. The result is reporting that seems designed to deter the reader, with page after page of densely packed text and hard-to-decipher tables.

Companies also fail to link governance to the front of the report, leaving the impression that governance is an academic exercise, divorced from the real running of the business.

With so much disconnected information, companies’ messages go missing. The right approach, though, can transform your communications. The ideas below will help you to improve the accessibility and effectiveness of your governance reporting.

Content

• Simplify your governance section by stripping out anything that properly belongs in your business review or OFR, such as corporate responsibility or principal risks and uncertainties.
• Put a human face on your disclosures by including letters from the chairman and the chair of the remuneration committee. These are also great places to set out your key messages.
• Use summaries or ‘at a glance’ pages to make your disclosures work for skim readers and to provide context for those who go on to read the detail.
• Think about your structure and aim for a narrative with a logical flow, which is easy to follow and more likely to convince your readers.

Navigation

• Consider including a content list at the start of each section, to guide readers quickly to the information they want.
• Employ clear, bold cross-referencing to show where readers can find out more.

Design

• How your report looks has a real influence on whether people read it, so follow the design you use in the front of your report and make sure there is plenty of white space.
• Create charts and diagrams to bring the report to life. These are particularly helpful for visual learners but all report users will find them useful.
• Emphasise key points within the text by using pull quotes and boxes.
• Use plentiful subheadings to divide each section into more digestible chunks.

Text

• Use the active voice to improve the clarity of your writing and make it more engaging.
• Break up long paragraphs to make them easier to read and create a more appealing layout.
• If you’re reusing text from last year’s report, review it carefully to make sure everything is still relevant and required. Rewrite as necessary to keep it fresh.
• Excessive capitalisation makes text much harder to read. Only capitalise proper nouns.

Adopting these principles will improve your governance reporting and help turn your annual report into a single, integrated document, which better reflects the way you run your company.

This approach will also make your governance reporting work far better online, where readers expect to find the key messages instantly and have information presented to them in bite-sized pieces. The increasing tendency to access reports on mobile devices will only make this aspect more important.

Find out more

Take a look at my annual report copywriting and annual report assessment services.

Contact me to discuss your needs.

Check out some of my recent annual report projects.

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Many companies see the annual report as just that – a report on last year. From this standpoint, the report becomes a compliance exercise, adding little value to either the company or its investors.

The best reporters view the annual report as their once-a-year chance to explain their company to the market. They understand the power of bringing together pertinent information in a compelling narrative, so that investors have a clear view of what the company does, how it has performed and where it is going.

Does it really matter?

In a word, yes. To work out what your shares are worth, investors need a lot more than your past financial performance. They’ll want to assess your likely growth rate, the quality and experience of your management, your strategy and business model, the strength of your brand, your approach to corporate responsibility and a host of other factors not captured by your historical numbers.

Giving investors this information pays off. Research by FutureValue shows that the quality of a company’s narrative reporting correlates with its share price performance. This is not surprising, since:

• good narrative reporting helps investors understand your company and predict its performance. Investors hate uncertainty. The more they know about your business, the better they’ll be able to predict its performance as market conditions change. Greater investor confidence should mean better share price performance.

• what you write speaks volumes about the quality of your company. For example, you can only write clearly about your strategy if you’ve thought clearly about your strategy in the first place. One of the key benefits of producing a good annual report is the additional rigour it imposes on your strategic processes.

Top tips for improving your annual report

If you want to get the most from your annual report and maximise your return on the time and money you invest in it, the following tips are the place to start.

1. Define your audience

To communicate properly, you need to have a clear idea of who you are writing for. Trying to please too many audiences will result in your report pleasing nobody.

For most companies, investors are the primary audience for the annual report. Remember, though, that your other audiences – such as customers, suppliers and employees – will still read your report and everything you say must be consistent with your messages to them.

2. Work out your style

Many companies write their reports in dry, formal language because they think that’s what investors expect. They forget that investors are also people and that people want to be interested and engaged.

There’s no ‘correct’ style for communicating with investors. What’s important is that your style should be easy to read and reflect the way you want others to perceive you. Using the same language and tone of voice in all your communications helps build your brand with investors.

Whatever your style, avoid industry jargon. Many investors are generalists and jargon will deter them. This is not the same as ‘dumbing down’. Even the most complex ideas can be explained in simple language.

3. Create a narrative

The narrative part of an annual report explains such things as what the company does, its strategy and markets, its performance and its goals for the future. Good narrative reporting is more than a collection of statements about the company. It takes the word ‘narrative’ literally, meaning a story.

Your story for investors – often referred to as your investment case – should explain why your company exists, what you have achieved so far and what you hope to achieve in the future. This structure has a logical beginning, middle and end.

The benefits of stories are that they:

• keep the reader’s attention
• help them remember information about your company, and
• mean that the reader is more likely to believe that information, because it’s presented as part of a coherent whole.

Once you’ve worked out your story, you can also use it to structure the investor section of your website, your results presentations and any other investor communications. You can also easily adapt the investment case to work with other audiences.

4. Empathise

To be effective, your narrative must tell investors what they want to hear. If it doesn’t, they’ll either lose interest in your company or ask you anyway. It’s quicker, cheaper and more effective to be clear in the first place.

Working out what to talk about requires empathy. Put yourself in the shoes of a potential investor. Imagine it’s your money on the line. What would you want to know about the company? Also, think about the questions investors often ask you. Are there things they misunderstand? These are obvious areas for more explanation.

Deciding how much detail to include is a key judgement. A single line on your strategy is unlikely to convince investors but if you write four pages, they’ll struggle to pick out what’s important.

Again this comes back to empathy – if you were an investor, what would you want to know? Once you’ve worked that out, explain it clearly and in the fewest words possible.

5. Communicate first, comply second

When you’re writing your narrative, it’s easy to get distracted by the need to comply with the rules. A box-ticking approach is guaranteed to destroy your story’s flow.

The way round this is to write your narrative, then check it complies. If you’ve really thought about your investors’ needs, it’s likely that what you’ve written will cover everything required by the rules.

If you find that any required information is missing, then it’s probably not material for your company. It should be simple to slot a brief explanation of it into your narrative.

6. Explain the bad as well as the good

It’s tempting to say less when times are tough. This is a mistake because:

• unexplained problems damage investors’ confidence. As a rule, they avoid companies they don’t understand
• if you can explain a problem clearly, you must know why it happened. Investors are therefore more likely to believe you can fix it, and
• honesty is vital for trust. Investors don’t back management who hide things from them.

So be upfront about how things have gone. And don’t forget, next time you report, to give an update on the problem and how you’re getting on with resolving it.

7. Repeat yourself

Keeping your messages the same over time reinforces them in the minds of your audience. Changing your messages without good reason only confuses them.

It’s also tempting to think that having said something once, you don’t need to say it again. You explained your strategy last year, so why go over it this time?

First, because people forget. Investors are bombarded with information. The chances are that they’re not going to remember something until they’ve heard you say it several times.

Second, some of your audience will be new to your company. You should make it easy for them to find the information they need.

To make life simpler for yourself, you can reuse material you’ve already created, for example in your results announcement and presentation.

8. Learn from others but don’t imitate

Look at examples of best practice but only take what’s relevant for you. Slavishly copying someone else’s structure or content is as self-defeating as a compliance-led approach. Leave out the parts which won’t help your audience understand your company better.

You should keep an eye on your competitors, since what they say affects what people think about you, but you should use your annual report to differentiate yourself. If you communicate clearly, then you’ll stand out from the legions of companies that don’t.

9. Get help

You wouldn’t think twice about using an external designer for your annual report. Shouldn’t you adopt the same approach for the most important part – the content?

Using an annual report copywriter allows you to benefit from:

• expertise – a deep understanding of the content you need and how to turn it into a compelling narrative for your investors
• experience – applying the lessons learned from numerous clients over many years
• value for money – creating the content only requires a fraction of the total project cost
• additional resource – relieving the pressure on you at the busiest time of your financial year
• consistency – your report will support your brand and your corporate tone of voice

Download this post as a pdf: annual report copywriting: top tips for improving your annual report

Find out more

Take a look at my annual report copywriting and annual report assessment services.

Contact me to discuss your needs.

Check out some of my recent annual report projects.

A couple of weeks ago, I was with a client who was putting the finishing touches to an annual report. Several people had written parts of it – me, investor relations, the finance team and company secretarial – and we were ironing out the inevitable stylistic differences.

That’s when somebody raised this question:

Is it while or whilst?

There were plenty of theories round the table, but the simple answer is that there’s no difference in meaning.

There is, however, quite a difference in the impression they make. I’ve always favoured the more-relaxed and accessible while. There’s something crusty and old fashioned – pompous even – about whilst, which is why I routinely delete it when I’m editing.

A subtlety

Some people think it’s only correct to use while (or whilst) when describing a period of time. The usually sensible Economist style guide falls into this camp.

Others (such as Fowler’s Modern English Usage) think it’s perfectly allowable to use while in place of other words. In the following example, while replaces although:

While 2011 is likely to be difficult, we expect better conditions in 2012.

This use is widely accepted and I’ve employed it many times. On reflection, though, I’d prefer the sentence with although. All writers know when a sentence feels right and although does it for me.

Show, don’t tell is the most common advice for fiction writers. It’s also an excellent – and often overlooked – tool for business copywriting.

Consider the company that claims to be a leader in its market. At best, an unsupported statement like this gets a dismissive shrug from the reader. At worst, it suggests the company is anything but. Does it mean they’re in the top three? Top ten? Which market? The UK? The world? Vagueness increases suspicion and reduces credibility.

In business copywriting, showing is the answer

The only way to convince with statements like this is to show that they’re true. State your market position, your share, your growth rate. Be clear which countries or regions you’re talking about. If you’re writing an annual report, set out who your competitors are and how you’re differentiated from them. Showing helps the reader understand your business and generates trust.

The same approach applies to all the other adjectives that companies use – innovative, values-led, sustainable, passionate, committed. If you can’t show us that they’re true, we won’t believe you and we certainly won’t care.

Some of these claims, such as those about values, defy statistical evidence. For these, you’ll need to use case studies. But make sure the examples you use are really representative of your business. The outside world might not know any different but your employees will, and they’ll judge you for it.

Want to see more business copywriting posts? Try:

• Business copywriting: why your solutions are actually problems

Every business copywriter has clients who love abstractions. Competencies, verticals, footprint, added value – these words are so common that businesses use them without thinking.

I’ve let plenty of these through myself, both in business copywriting and when I worked in corporate communications. It’s time, though, to be more vigilant.

So when do your solutions become problems?

1. When there’s no fixed meaning

What’s an IT solution? Is it hardware? Software? Perhaps it’s both, with some consultancy and a free iPhone thrown in.

You may have a clear idea of what you mean but there’s no guarantee your audience will, unless you spell it out for them. There’s no shame in being clear about what you’re selling.

2. When you sound silly

Want a dispense solution for the office? Probably not. But you might want a coffee machine.

Using abstractions to make a simple product sound clever achieves exactly the opposite. You’ll confuse and irritate your readers and make yourself look daft into the bargain.

3. When you sound like everyone else

Here’s a common defence for abstractions: ‘Everyone in my industry speaks like this. They know what I mean.’

Maybe they do speak like that. And that’s a problem in itself. Because how are you going to make your company stand out from the competition, if you sound exactly the same? Copywriting is not the same as copying.

And don’t be so sure that everyone knows what you mean. See (1) above.

4. When you sound disingenuous

The problem with euphemisms is that your readers aren’t stupid. They see through you. They think you don’t respect them enough to give it to them straight. And they trust you less.

5. When it sends the wrong message

It’s great that you want to sell me some added-value services. But if your standard services don’t add any value, why would I want them? Don’t accidentally disparage the bulk of your business.

Like this? Try:

• Copywriting tips

It’s easy to believe that good writing has gone the way of the vinyl record. Whether it’s content mills churning out filler for the tight-fisted and undiscerning or video’s plans for world domination, there’s plenty of gloom surrounding the written word.

In the business world, though, good copywriting still counts. It’s not just Leeds Building Society that thinks so. In Freshword’s survey of business leaders, almost all the respondents believed that ‘poor writing poses serious risks to their reputation, and affects [their] financial and legal risk’.

The message is clear: bad writing costs businesses time and money. It also damages the writers, affecting the way they’re perceived by their bosses, customers, colleagues and everyone else who has to wade through their dreck. Banging out a video on your iPhone isn’t going to fix that.

So what is good writing?

Let’s be clear. Good business copywriting is not about meeting an arbitrary ideal of grammatical correctness. While grammar is important, some so-called ‘rules’ are pointless and lead to clunky writing.

Good business copywriting is about communicating effectively. That requires three things: thought, clarity and engagement.

1. Thought

Much of the vague and waffly writing that circulates in business results from the author not knowing – or caring – which points are worth making.

To write well, you have to:

• understand your subject
• think about what your audience wants to know
• decide the order in which to say it, and
• know what to leave out.

It’s tempting to skip the thinking stage because thinking looks like slacking off. Don’t give in. Thinking is the most important part of the copywriting process. Look at it as the foundation on which your writing is built.

2. Clarity

Clarity is essential for credibility but a cogent argument will only get you part way. True clarity requires the right words, deployed in the right way.

There are a few tricks that can help, such as:

• avoiding jargon
• using the active voice, and
• stripping out words that don’t affect your meaning.

Ultimately, though, clarity comes from rewriting and perseverance. Question everything you’ve written and keep honing your prose until it says exactly what you want it to.

3. Engagement

Good business copywriting creates a bond with your readers. It draws them in and makes them want to read to the end. So how do you do this? Thinking about what your audience wants is part of the answer, as is expressing yourself clearly. Real engagement, though, requires your writing to create the right emotions in your readers.

If you want to inspire trust, for example, try an authoritative tone. Removing qualifiers that weaken your arguments, such as ‘could’, ‘can’, ‘might’ and ‘often’, will take you in the right direction. Claim too much authority, though, and your readers will see you as patronising, arrogant or simplistic. The trick is to find the right balance, considering at every step how your readers will perceive what you say and the way you’ve expressed it.

The importance of practice

The final thing you need for good copywriting is not a characteristic of the writing itself but of your approach to it: you need to practice. Like any art or craft, your writing will improve if you work at it. If you want a head start, get some training. And if you really don’t have the time to hone your own skills, hire someone who already has them.

If you liked this, try reading…

• Copywriting tips: writing for more than one audience
• Copywriting tips: length matters
• Copywriting tips: why business writing has to be tight