IF you are looking for guidelines on how to design and format online annual reports so that they will meet the needs of most investors, the Investor Relations Society’s best practice guidelines are a good place to start.
Issued as a way to provide guidance to participants in the UK IRS’s annual IR Best Practice Awards for the past several years, the guidelines for online annual reports mirror our own recommendations over the years. They are endorsed by a veritable who’s who, including:
- The Association of Corporate Treasurers;
- The Association of Investment Companies;
- The Association of Private Client Investment Managers and Stockbrokers;
- The Department of Trade and Industry Business Finance & Investment Unit;
- The Institute of Chartered Accountants in England and Wales;
- The Institute of Chartered Secretaries and Administrators;
- The London Stock Exchange;
- The National Association of Pension Funds; and,
- The Quoted Companies Alliance (QCA).
These guidelines explain the basic requirements for usable online annual reports. Even though they are produced in the UK, the guidelines are universal and can be applied anywhere in the world. Interestingly, they refer to MD&As, which is a decidedly North American term (as I said, they really do mirror our own recommendations).
My view is that anyone following these guidelines can be confident that they meet the SEC’s requirements for online annual reports and proxy statements.
The IRS guidelines are provided in HTML and in PDF (221 KB). However, since they go somewhat beyond what we consider the bare minimum requirements, let me summarize for you what I think are the critical elements of usable online annual reports and proxy statements.
- All pages of the annual report and proxy statement are provided in HTML and not images. Shareholders must be able to copy text from the documents and paste it into software of their choice.
- All financial tables are formatted using HTML tables and not images to allow for easy right-click importing into Excel and for copying and pasting.
- A detailed, clearly labeled navigation menu is provided for each document (preferably visible on the left side of the web page) which allows shareholders to, at minimum, access main sections of each report.
- All HTML pages have printer-friendly HTML versions. These strip out unneeded elements from the page to save shareholders wasting paper when printing out information.
- Users can search the annual report and proxy statement with search utilities specific to each document.
- A downloads area is provided where shareholders can download, print or save a full copy of the annual report and proxy statement as well as individual sections of these reports in PDF. The financial statements should be available in Excel as well.
- A link should be provided in the navigation of each document to an order form where shareholders can request the reports to be mailed to them. U.S. companies should provide an email and phone option for ordering print materials.
The above are minimum standards that any company should be able to meet. Much more can be done to improve the usability of online documents by thinking about how investors use them. It is best to draft these documents from the start with the end goal of publishing them online. This will help to ensure the documents are drafted with online use in mind.
We will be publishing a list next month of web designers and developers who are committed to producing reports that meet these minimum standards. The deadline for submissions is Monday, August 27, 2007.