Post #43
Feb 3, 2021
Claire Bodanis
Annual reports must tell the truth to be a) compliant, and b) useful. But what is the truth when it comes to reporting, and why is it more important than ever? Claire shares her thoughts.
I’m glad I kept to my holiday plan and didn’t write a January blog. Publishing in the morning, it would have been irrelevant by lunchtime, given that blog day was 6th January, and, from the minute the US woke up, the news was dominated by the insurrection in Washington DC and the assault on the foundations of American democracy. I reflected on this the following day in my monthly Trust me, I’m listed webinar (sign up for them here!), because it spoke to the very heart of why I believe the annual report, done well, is so important to a responsible, democratic society.
And why is that? As I see it, the fracturing of democracy in the US has been caused by falsehoods being spread as truth. So-called ‘news’ channels peddling the most incredible lies to a fearful population, because fear sells. Yes, there were some very unsavoury characters involved who would no doubt be up for a bit of insurrection whatever the circumstances. But that doesn’t in my mind explain the many others involved, nor indeed the millions of ordinary people who, by being fed false information, believe that Trump actually won the US election, amongst even more outlandish things. Like, apparently, the California wildfires being caused by Jewish bankers beaming lasers from space to benefit themselves financially. Or that the Biden administration is going to round up Republican supporters and put them in concentration camps for ‘reprogramming’.
In this context, with ‘news’ channels promulgating outright lies because they sell, it’s more important than ever that those of us called on to report information tell the truth. And it’s my firm belief that corporate reporting, with its requirement to be truthful, and the checks on it through auditing to ensure that it is, has an essential role to play in the fight for truth. But what is ‘the truth’ in an annual report?
It was summed up very neatly, actually, by one of my panel guests during our November TMIL webinar – lawyer Richard Preston from Addleshaw Goddard. He said: ‘All too often the annual report becomes a warehouse of “information that is true” rather than “the truth about our company”.’ The latter is, of course, where storytelling comes in. Good storytelling is far from being spin or hyperbole. It’s the act of putting together information that is true (ie facts) in a way that tells an open and honest – a truthful – story. This is at the heart of good reporting. It’s also often at the bottom of the reporting to-do list, because it’s hard to do well. It takes good communication techniques and skill with language to create a report that both contains information that is true, and tells a meaningful, thus true, story. A story, indeed, that someone would want to read because it considers their interests.
And, from the regulatory perspective, while ‘telling the story’ is one of the Financial Reporting Council’s requirements, it’s a much more subjective judgement than whether or not you’ve ticked a specific disclosure box. Who has ever received one of the FRC’s finger-wagging letters because they didn’t tell their story well enough?
This year marks a real opportunity for companies to tell their story well – ie truthfully. Why? Because it’s a year like no other, which means everyone has a clean sheet. And the nature of that year, with far more attention to the personal and the individual, gives us licence to be more personal and engaging – which is, after all, what communicating is all about. It’s also a year when the truth matters more than ever.
I must confess though, in thinking about this great opportunity these last few weeks, and reflecting on the particular importance of our task as reporters this year, my heart sank just a little. I love working in reporting because, as well as being something I believe in, it is a hugely intellectual, creative, and, crucially, collaborative exercise. But yet more lockdowns, more virtual schooling, more Teams instead of real gatherings with colleagues and clients, are, frankly, spoiling my fun.
But luckily, today I found new inspiration for the lockdown reporting weeks (and possibly months) ahead. I’m writing this on Sunday afternoon, and it also happens to be Candlemas. As the name suggests, this day in the Church calendar involves lighting candles, commemorating John 8:12, ‘I am the light of the world’.
It may seem a little grandiose, but the idea of being a light in the world renewed my energy and enthusiasm for the hard work of storytelling, rather than getting away with simply reporting information that is true. It reminded me that, done well, annual reports can indeed shine the light of truth that I believe is so sorely needed in the world today.