Too many companies treat the annual report as just that – a report on last year. Think of it as your once-a-year chance to explain your company, though, and you’ll approach the content in a completely different way.

To get the most from your annual report, you need a coherent story. For listed companies looking to attract investors, this story is often called the investment case. The framework can also be easily adapted if your report is aimed at a different audience, such as customers.

What your corporate story says

At its simplest, your story should set out:

• why your organisation exists
• what you have achieved so far, and
• what you hope to achieve in the future.

The example below shows how to construct a typical investment case, which will give the readers a clear understanding of why they should buy the company’s shares.

Why should I buy your company’s shares?

The investment case answers this key question by answering a series of smaller ones. To  explain why your company exists, you will need to answer questions such as:

• what need does your company meet?
• what are your products and where do you sell them?
• what are the dynamics of your markets?
• how are you placed in those markets and who are your competitors?
• what strategy are you following to exploit – or counteract – your market position and dynamics?
• what is your business model?
• who are your management and how do they control the company?

Answering these questions, and the similar sets describing your company’s achievements and aims, generates your investment case.

The logical progression here is vital. At each stage, you must tell your audience what they need to know to understand what comes next. To understand why your company sells the products it does, investors need to know the need those products meet. To understand your market dynamics, they need to know the products. To understand your strategy, they must understand your markets.

The investment case can be summarised in a few paragraphs, giving you a story which is quick and easy to tell. It then needs to be supported by sufficient credible and relevant information, so that investors can test its validity.

The advantages of a corporate story

Creating a story for investors helps them absorb and remember information about your company. That information is also more likely to convince them, since it forms a part of a coherent whole.

The investment case is also a versatile tool. You can use it as the framework for all your investor communications – your annual report, website, results presentations and educational events. You can also adapt it for other audiences, such as employees, suppliers and customers.