Neenah Paper
Neenah Paper is proud of its annual report, so much so that it’s included in this year’s annual report sample set. Designed by the award-winning brand strategy and communications design firm Addison of New York, the Neenah Paper, Inc. 2008 annual report demonstrates the unique voice that a paper choice can add to a company’s image through this annual, and somewhat personal, communication with its stakeholders.
“We have such confidence in the team at Addison, this is the third annual report they have designed for us,” says Tom Wright, director of advertising and design for Neenah Paper. “This year we asked them to write an article about the trends in annual reporting and information design for inclusion in the kit. We liked it so much, we decided to make it a poster.”
We also thought it was great information. So, with permission from Neenah Paper and Addison Design, we’re passing it along to you.
The More Things Change, The More They Change Back To The Way They Were.
To say that there has been a sea change in the way companies and stakeholders think about annual reports – and the way in which people get financial information about companies – is to state the obvious. Less obvious, however, are the various attempts made by companies to save money. Most of these can be boiled down to one basic strategy: printing fewer annual reports and putting more financial information online.
That said, recent pressure from the SEC to bring plain English and information design to financial disclosure, taken together with complaints from shareholders about the dearth of information publicly available, and the high cost of proxy solicitors, has produced something of a swinging sound (could it be a pendulum?). Or perhaps it’s the sound of smart, sophisticated companies seizing the opportunities and efficiencies made available through strategic, brand-based suites of materials – including traditional annual reports. To which we say, “Yay.”
What Are The Tightest Ships Doing?
If you want to know how the smartest, most sophisticated companies are communicating with their shareholders and other key stakeholders, a good place to start is at the top. A cursory look at Fortune’s Top Twenty most profitable companies reveals that fifteen of the top twenty companies are now preparing and distributing full “traditional” annual reports with typeset financial sections that highlight the information most meaningful to their shareholders.
Sixteen of the top twenty are doing Corporate Responsibility (CR) pieces, proof positive that CR is no longer a luxury for any company. Our research is showing that more large- and mega-cap companies are issuing suites of materials strategically centered around the annual report. For some of Addison’s clients, we have split the financial section to form a separate annual report, with the narrative section serving as a marketing-focused summary report or annual review. Often, a Corporate Social Responsibility report or Fact Book completes the package. Some companies are including companion financial reviews, corporate capability reports, philanthropy reports, and employee handbooks, all with online versions. Key word: versions.
As for the most common annual report format in the U.S. at the moment, the infamous 10-K wrap. Even the SEC’s James Freeman has said, “I’ve been the SEC’s Investor Advocate since January of 2006, and I’m still trying to find retail investors who actually read this stuff.” In reality, the 10-K wrap was never intended for the general public and cannot communicate as well as a traditional annual report. So there.
The SEC has expressed extreme disappointment over the lengthy, confusing, dense and unreadable Compensation Disclosure and Analysis (CD&A) sections of many U.S. companies since this information was required in a format that was designed (theoretically) to bring clarity to this information.
The SEC mandate for plain English and information design, coupled with shorter filing periods and more complex regulatory requirements for annual reports make a separate financial section more attractive to deadline stressed finance and legal departments. So, they’re fans.
New Media Isn’t Necessarily Digital Media: Projecting Your Brand’s Values Through Everything You Do.
A large number of Addison clients have learned that using the annual report as part marketing brochure, part corporate capabilities brochure and part financial report maximizes its value. As our research indicates, more mid- and large-cap companies are now taking a similar approach, although by different paths. In every (successful) case, sophisticated companies realize the opportunity to project their brand values at every point of contact – with investors, employees, the media and other key stakeholders.
From the cover, to the chairman’s letter, to the narrative section, and into the MD&A, there is more discussion of corporate strategy, planning and short- and long-term goals. We advise our clients that a company’s business strategy should be discussed not only in the narrative section of the report, but also throughout the MD&A.
Companies are also beginning to re-think the way information is structured and presented in both the printed and online versions of the annual report. Faster cable-based broadband gaining acceptance, and with Flash-enabled browsers now the norm, video has become an accepted and exciting and (dare we say) sexy innovation within the online annual report.
Many companies have short video clips of their CEOs and presidents, or manufacturing centers and end-user environments. That said, the need for brevity and conciseness has never been greater.
One of the most important and far-reaching new trends for annual reports is the move towards plain English and information design in financial reporting. Our recent MD&A simplification projects highlight the important relationship between writing in plain English and using information design.
“Cheaper” Isn’t Always Less Costly: The Truth About Notice & Access.
If a company’s primary goal in transitioning to Notice & Access is budgetary, they are often disappointed with the actual cost of the program – depending on their press run. Let’s compare the traditional model of regulatory fulfillment against the new N&A model. Under the traditional model, a company will incur the following expenses:
- Position processing fee
- Mail elimination fee
- Nominee fee
- Outgoing mailing envelopes
- Proxy or notice forms
- Business reply envelopes
- Outgoing proxy mailing postage
- Traditional printing costs for full-run annual report
- Shipping of report
Under the N&A model, a company will incur these expenses:
- Position processing fee
- Mail elimination fee
- Nominee fee
- Outgoing mailing envelopes
- Proxy or notice forms
- Proxy solicitation (due to low voting response)
- Outgoing proxy mailing postage
- Outgoing notice mailing postage
- Fulfillment requests postage
- Web hosting (for proxy voting and annual report posting)
- Interactive HTML report
- Inventory management of warehoused annual reports
- N&A printing of annual reports (up to 15 percent of traditional run)
- Shipping costs
As you can see, the N&A model adds some additional costs, which can add up to more than the savings realized by lowering the press run. Addison recommends a carefully timed, progressive approach to transitioning to N&A, if that is proven to be the most effective, economical path. It may be that a stratified distribution model would maximize the effectiveness of the program. You know, if you’re into that sort of thing.
Go Smart Or Go Home.
There have been more changes to financial reporting, disclosure and investor relations rules and requirements in the past few years than ever before. With these changes come new challenges and new opportunities to make your annual report work as hard as it possibly can. But whatever the vehicle, every successful company will need to rely upon effective design and strategic thinking to establish a memorable connection with their stakeholders. It’s not exactly “Go big or go home.” But it’s close.
For more information about premium papers from Neenah Paper, visit www.neenahpaper.com. To request Neenah Paper swatchbooks, call 1-800-558.5061 or e-mail samples@neenahpaper.com.
For a copy of the new Neenah Paper Annual Report Samples set, please contact your Neenah Paper sales representative or merchant.
To request a copy of the Annual Reports Are Hot poster, please e-mail samples@neenahpaper.com.
