Are annual reports on the way out?

The Financial Times reports that HSBC'S annual report has grown to such a massive size that Britain's postal service, the Royal Mail, has had to limit the number its postmen carry in order to prevent back injuries. The 454-page tome, which weighs 1.47 kgs, or just 3lbs, is now being used in the debate as to whether company reports are necessary and whether they still deliver the kind of information that investors need.

Writing in the FT, Barney Jopson comes up with some interesting information in his piece Why corporate reporting so seldom enlightens.

You can read the entire piece here.

Critics say investors are not getting what they need. They reckon the reports have turned into tick-the-box documents. More to the point, the communications that move markets are the earnings press releases and the announcement of deals and disasters, not the annual report.

As PwC partner David phillips told Jopson: "Perhaps one of the big 'take-aways' from Enron should have been to ask: is the reporting model flawed? Instead, they tried to fix the systems and controls."


All valid arguments. Trouble is there's little agreement on what the alternative should be.

In any case, I still go to annual reports when I need the official line about a company's operations, everything from the size of its workforce to the workings of internal units. Sure annual reports are of limited value and excessive disclosure is counterproductive. But at the same time, they're not completely useless as a starting point for information gathering.

So until we get some sort of consensus about a new path, company tomes will be around for some time.