Study "Corporate Reporting Monitor"

The Corporate Reporting Monitor 2020 is based on a survey of companies in the Swiss Market Index, Swiss Performance Index, German Stock Index, Mid-Cap-DAX, German TecDAX, Small-Cap-DAX and Austrian Traded Index (SMI, SPI, DAX, MDAX, TecDax, SDAX, ATX). The 2020 survey was supplemented for the first time by a survey of proven experts from the DACH region in order to make their knowledge and trend assessments accessible. Each year, the study focuses on a specific topic. In 2020, the special section is dedicated to the topic of sustainability reporting. The study is designed as a compass for strategic developments, trends and benchmarking. It is produced in cooperation with the Center for Research in Financial Communication at the University of Leipzig and the University of Applied Sciences St. Pölten.

The future belongs to the Stakeholder Report. The predominance of reporting with a focus on the capital market is a thing of the past. The target groups are becoming more diverse and with them the information needs. 

• Dialog with stakeholders is becoming increasingly important.
• The capital market continues to be cited as an important target group
• The goal of "increasing trust in sustainability reporting and the company's long-term perspective" is the most significant increase in importance compared with the previous year.

Synergy potentials are now recognized. However, there is largely no consistent monitoring of success in reporting:

• the annual report is only formally part of the communication strategy in one third of the companies.
• Around half of the companies stated that the annual report is oriented to the communication strategy.
• It is expected that companies will increasingly coordinate their reporting and communication strategy in the future and thus make use of synergies (e.g. multiple use of texts, images and diagrams). 

The digitisation trend is irreversible, the "print first" approach is no longer the first choice. In the EU, ESMA requires iXBRL/XHTML reporting for financial reporting from 2020. Already today, non-financials are often published in purely digital sustainability reports:

• Only one-fifth of companies still choose a print-fi rst approach, while the Online first approach now has the same number of proponents.
• PDF remains the dominant format. 

Sustainability is part of the strategic agenda. Sustainability dominates the social discourse and permeates everyday corporate life. This topic is attracting increasing attention in the annual report:

• "Increasing confidence in sustainability and the long-term perspective" is the goal with the greatest gain in importance (from 5th to 3rd place).
• Currently, only just under a fifth of the reports are externally audited.
• Around three-quarters of the companies have identified the sustainability issues relevant to their business.

The Corporate Reporting Monitor 2019 is based on a survey of companies in the Swiss Market Index, German Stock Index, Mid-Cap-DAX, Small-Cap-DAX und Austrian Traded Index (SMI, DAX, MDAX, SDAX, ATX) (30% response rate). The survey is structured according to the strategic management cycle: It covers questions of planning, organization, management, resource allocation and evaluation. In doing so, the Corporate Reporting Monitor deliberately applies a strategic perspective to the annual report - an instrument that is still predominantly seen as a regulatory necessity rather than an opportunity for strategic communication.

Fig. 1 Objectives of the reporting. Question: In your opinion, how important are the following goals for your annual report? (N = 48).

With regard to the "planning" of reporting, the study surveyed the primary reporting objectives of listed companies (see Fig. 1). It is not surprising that compliance with regulatory requirements is considered the most important goal by those responsible for reporting. At the bottom of the list of priorities are classic public relations objectives such as maintaining the corporate image, positioning the company and increasing awareness. The survey also asked the respondents to assess the relevance of these goals in three years. It turned out that increasing confidence in sustainability is seen as the topic that will gain the most importance. It is also expected that regulatory requirements will become even more important in the future - some of them with a focus on sustainability reporting.

Fig.2 Annual report as part of the strategy. Question: To what extent is the annual report part of your company's strategic communications planning? (N = 44).

As part of the organization, the Corporate Reporting Monitor dealt not only with formats but also with the synergies between the reporting process and corporate communications and the role of the annual report as a strategic communications instrument. The results show that only 34% of the companies have formally integrated the annual report into their communication strategy, while for 36% of the companies the annual report is largely oriented towards the communication strategy.

Fig.3 Overall responsibility and contributions of the functions. Question: Which department has overall responsibility / project management for the preparation of the annual report? (N = 55). Question: Expressed as a percentage, how much do the departments mentioned below contribute to the contents of the annual report? This includes texts, figures and illustrations (N = 46). Abbreviations: Corporate Communications (CC), Investor Relations (IR).

With regard to the management phase of "leadership", the study analysed the role of the management and supervisory boards in the reporting process. It also ascertained which corporate functions assume project responsibility for the annual report and which contribute to the report.

As Figure 3 shows, corporate communications or investor relations tend to be in charge of the overall project (39% each). However, at 26%, the finance department actually contributes the largest share of content.

Fig. 4: Future use of external service providers. Question: In your view, to what extent will the involvement of external service providers change over the next three years? (N = 43).

The Corporate Reporting Monitor examined various aspects of resource allocation in the reporting process, such as budgets, team sizes or human resources used throughout the company. With regard to cooperation with external service providers, the study showed that companies often use agencies for translations, design, online implementation, printing and editing (see Fig. 4). However, when asked about the involvement of service providers in three years' time, about one-third of those surveyed said that the number of service providers would decline.

Fig. 5. forms of evaluation of the annual report. Question: How is the annual report evaluated in your company? (N = 44).

Finally, the Corporate Reporting Monitor examined the evaluation of the annual report. Since most companies have not integrated the annual report into their communication strategy, it is not surprising that the report or the reporting process is rarely formally evaluated. The study found that informal feedback is the most commonly used performance metric - from target groups, colleagues or management (see Figure 5).