Reporting on COVID-19
The world has changed. Markets have changed and, for many companies, their business has changed profoundly. This will mean the next wave of annual reports will have to change and are likely to be the most important group of reports in a generation.
The magnitude of COVID-19 on all businesses globally means that stakeholders and analysts will be seeking more information from organisations to explain the impact on them of the pandemic. Stakeholders will also want different, more specific information about how companies were impacted directly, how they responded – and the likely long-term effects.
Along with the regular KPI statistics that are generally presented in the annual report, some fundamental points will need be discussed in relation to resources, actions and future outlook. The Financial Reporting Council has outlined this succinctly in a five-point list of investor questions.
In addition to these questions, investors will be looking for further disclosure on a range of impacts on the business. Each business will have a unique set of concerns that could range from the amount of government assistance available, to the short and long-term effects on employees. Stakeholders will also be looking for an overview of the impact on the company’s market and how this has impacted the business. KPMG have a helpful overview.
What should companies be doing now to prepare this additional information? What will their design partner need to convey this information clearly? And how can it be presented best?
Companies should be collecting data to explain the impact of the pandemic in a statistical way while also highlighting the human stories of how employees and customers have been affected.
Companies should be collecting data to explain the impact of the pandemic in a statistical way while also highlighting the human stories of how employees and customers have been affected. These stories will be the most effective way of demonstrating the company’s purpose and its commitment to employees, customers and their community.
The material that is gathered about the impact of COVID-19 is likely to form a substantial part of the next wave of annual reports. Devoting a paragraph or page in the CEO’s report is just not going to cut it – and companies that do this will likely be scrutinised further. The material should be used in other ways too, as part of social media posts, on corporate websites, or expanded into video presentations.
In this time of unprecedented uncertainty, those organisations that present clear, concise and relevant information to their stakeholders will demonstrate that they have a clear sense of purpose – and inspire confidence.