The progress and potential of holistic storytelling

Posted in News and Reporting on 5 November 2021
By Jenni Fulton, Managing Director and Tim Marklew, Reporting Consultant

AIM and small-cap reporting continue to develop, moving towards a richer corporate narrative, but there is still work to be done.

In September, I visited a client at their office. The novelty of seeing people in person, rather than on screen, was still fresh and we reflected on the enormity of change over the past 18 months, the new normal and the opportunities and challenges this presents. But change, ironically, is nothing new of course.

Our conversation led us to a cupboard crammed full of annual reports like a corporate time-capsule. The journey these documents evidenced, from the first in 1947 (a flimsy thing) to last year’s glossy 130-page production, tells its own story, alongside the individual snapshots of the company’s life.

Ultimately, that is what corporate reporting is about: stories. There are many elements that have to come together to tell a great story. A clear narrative voice, an intelligible structure, three-dimensional characters, a strong central message, told through an appropriate medium. Reporting is no different. While the stars of the story may change, with purpose, strategy, risk and governance coming to the fore, bringing all the different aspects together to communicate a compelling message remains as essential as ever.

Seeing a bigger picture 

For AIM companies, that story has become increasingly important, to a wide range of stakeholders. With investors flocking to the market (the AIM All-Share Index rose 22% in 2020), they are on the lookout for captivating investment cases; company reputation, culture and ethical practices have become critical to customers and employees alike; while society expects every business to improve its ESG impacts.

These driving forces and the importance of a cohesive central narrative relate to companies ‘seeing a bigger picture’ – also the title of our latest research into the AIM 100 corporate reporting. The traditional focus on short-term financial performance is no longer enough, and the best companies are recognising this. They are embracing the opportunity to take a holistic, long-term approach, articulating a compelling and authentic corporate narrative with clarity and consistency, across a network of communication channels.

Joining the dots

In our recent review, the best reports and websites are demonstrating this ambition, with stakeholder needs at the heart of their thinking and the right information in the right place and clearly linked. However, although our research found clear progress, it also highlighted areas of opportunity for further development. 

Link purpose to long-term success  

More companies are talking about purpose and long-term success, but the best are showing how they are connected. Purpose statements and corporate narrative devices increased this year (57% now include a purpose statement, opposed to 20% last year), as companies sought to communicate the positive contribution they make to the world and demonstrate the component parts that enable it. ‘At a glance’ or company overview sections are evolving to explain how purpose, culture, values, strategy and sustainability are all aligned towards the end goal of generating long-term value for a range of stakeholders.  

Take sustainability seriously  

From financial services to pharmaceuticals, sustainability has to be central to the story. And we’ve seen measured progress here: 85% now have a sustainability section in the annual report (up from 71% last year); just over half (52%) identify their material issues (up from just 12% last year) and 38% make reference to the 2030 UN Sustainable Development Goals. By demonstrating engagement with global trends; presenting culture, ESG processes and policies as key strengths in your investment case, business model and strategy; and setting clear targets and articulating how you are managing and improving social and environmental impacts can make a huge difference. Even if you’re only in the fledgling stages of your journey, this communication is vital.  

Create a consistent and cross-channel network  

The FRC’s recent Future of Corporate Reporting paper was built around the idea of an agile reporting network. Although this was presented as a longterm idea, there’s no reason to not get ahead of the game. A whole suite of channels should be considered when communicating with stakeholders, with information and messaging placed where it’s most appropriate and impactful. The annual report should be a fluid and timely story of the year, free of static and unchanging policy information. Sustainability performance is outgrowing already lengthy reports and becoming better suited to its own separate document and web pages. And corporate websites – as the first port of call for most audiences – remain an untapped channel for a variety of information and disclosure.  

Balance the retrospective and prospective  

However, for many, the annual report remains the key channel for communicating with stakeholders, so it’s vital to make sure it’s pulling its weight. Where the report was once a backwards-looking picture of financial performance, it now needs to present a vision of where your organisation is going, with discussion of market trends (70%, up from 50%, now provide a dedicated market overview), strategic plans (57% include explicit plans or objectives for the coming year), risk management and long-term viability. Content on the previous year should focus on progress, with wide-ranging performance metrics and case studies showing strategy, culture, sustainability and governance in action.  

We believe it’s an exciting time for AIM and small-cap companies, with real progress being made in reporting and engaged audiences ready to hear your story. Corporate reporting has already come a long way – as that 1947 report proves. And as the pace of change continues to rise, it’s easier to get left behind and harder to catch up, so there’s no better time to embrace the opportunity to tell a better story; something that will not just encapsulate a moment in time, but show the compelling journey a company is on.

We’d love to discuss how Emperor can support you in telling your holistic story as part of your wider reporting suite. Email [email protected]

For more insight into the latest trends in AIM 100 corporate communications, you can read our research Seeing a bigger picture.

This article was first published in Issue 112: Autumn 2021 of Informed magazine.

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