Most investors either don't have the time, the expertise, or the inclination to plough through a hundred page annual report, particularly if they own several or many stocks and receive on average one annual report a week. Which begs the question: why do companies spend all that money and resources sending them out in hard copy?

This is an important issue, for several reasons. First, cost. Here are two images from the Portek Annual Report, which went out to shareholders this week.

Check out the colours, design and photography. It may not seem like a lot of money to spend S$50,000 or so on printing and mailing the annual report, particularly if the design, layout and photography already cost a lot of money. But that leads me to the second point, and that is, the environment. In the past, shareholders may not have cared too much about this, but as the proliferation of sustainability reports shows it is of increasing concern to shareholders. And if shareholders demand companies stop wasting a lot of paper (my copy of the Portek annual report will go into the recycling bin, with only a few pages having been read) then companies should respond.

I'm not saying companies should not bother producing annual reports. On the contrary, they are an important part of corporate disclosure and transparency. Beyond that, they are a source of pride for companies, because they sum up all their achievements over the previous financial year.

But the file is already sent to the printer in electronic format. It seems to me to make most sense to email the same file to shareholders as well. Or at least, to give shareholders the option of receiving the annual report this way.


Mark Laudi

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Labels: Annual Reports, Portek, sustainability report, Xpress