Electrolux have been awarded the best annual report in the World for 2010 by Reportwatch by e.com.
Their top 2010 annual reports were rated according to the following rating parameters:-

They key thing for me is that this process is almost global and free. Most “award” initiatives entail the payment of a fee by the listed company that serves as a revenue generating project for the sponsors / appraisers. Africa needs a different approach, one that puts the objective of transparent reporting and one that rewards excellence above the need to charge companies. E.com has done it why can’t someone do this for Africa?
Reportwatch has its weaknesses in that not all annual reports might be appraised, but 1,000 – 1,500 assessments globally is high and would be sure to capture the best in the World.
The space for African annual reports awards is open for someone to come in and improve reporting. Structured correctly an initiative such as this in Africa would have tremendous indirect benefits to sponsors. But commercially who could justify this? Not a lot of companies. The big accounting firms? Regional securities organisations have a vested interest in this. The African Stock Exchanges Association in association with a donor / grant funding related to governance. The absence of an initiative of this nature in Africa points to the following:-
- absence of regulatory regimes co-operating with each other across Africa
- absence of awareness at director level of the importance of the annual report
- perceived absence of commercial opportunity
Who created the Reportwatch appraisals?
“The two “generators” of the idea were Vero Escarmelle (a marketing and communication consultant) and Mike Guillaume (an economist and financial specialist). Both were heavy users of reports in their consulting practice (“Volvo, Philips, Saint-Gobain, Canadian banks and a few U.S. industrials were among the references regarding content at that time,” remembers Mike) and had an inside experience through the coordination of annual reports for financial institutions. After the spin-off of the reporting unit renamed enterprise.com (or e.com) in 1999, the Annual Report on Annual Reports became a trademark of e.com.”
Annual report appraisals look for and benchmark best practice in order to strive for higher -and highest- standards in financial and performance reporting, investor and stakeholder information, and corporate communication. The longer term advantage is that richer report content, higher report value, better access to company information decreases the cost of capital. Mmmmmm… can this really be motivated in illiquid African markets where no empirical evidence exists?
e.com provides annual report benchmarking services comprising report evaluation tools and reporting assessment services to help companies report better or best, on paper and online. The bottom lines in any report should:
- Mirror company value
- Show investor value
- Enhance report value
- Increase stakeholder value
e.com are quick to point out that the ranking and score are based on an evaluation of the company report and output and cannot be interpreted as such as an assessment or rating of the company that releases the report. However investors are able to infer some opinions and decisions based on report content:-
Robert J. Samuelson once wrote, “Annual reports often tell us more than their authors know or intend.” (Newsweek, April 21, 1997).
“Even though a relationship may be found -or argued- between company, report and shareholder value, mind the deductions! Enron used to produce a decent annual report before its collapse, while a market leader such as Microsoft, among many, has never been capable of publishing an attractive one (even online).Good performance and even less company size don’t necessarily translate into good reports. “
Their services can compare annual reports with peers, best practices and For a complete list of services go to www.reportwatch.net/e-com/making-reports-pay-off
I am sure there is a business model that can be applied for African markets to showcase good annual reports appraised on say basic parameters to start off with. The global audience this would attract would justify the expense.
Africanfinancials.com would be the first place to assess Africa’s online annual reports offerings.
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