Summary of the research findings

The results of the analysis were briefly presented in previous subchapters, however, no conclusions have been presented yet. To summarize the results of the analysis, this sub-chapter includes a list of the most important findings of the research.

1. Some of the sample companies produce HTML reports, however in the majority of cases, it was not comprehensive annual reports in HTML format, but annual re-views that included the highlights of the previous years and links to PDF annual report (or a series of reports). The content of such annual reviews was marketing-oriented, and not providing valuable information for investors.

2

Number of reports with future orientation in corresponding number of report's sections (CSR,

strategy disclosure, CEO review)

no future orientation moderately in 1-3 sections in 1 section of the report in 1 section + 1 moderately in 2 sections

in 2 sections + 1 moderately in 3 sections

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2. Few companies produce a single report, many tend to issue a number of publica-tions.

3. Few of the sample PDF reports had navigation bars on their pages.

4. The technological and design solutions of both HTML and PDF reports were not always chosen with the needs and expectations of primary target audience (in-vestors and shareholders) in mind (usage of marketing videos with no transcripts, distractive animated elements, complex multi-level menus).

5. Even though most of the companies voluntarily disclose strategic and sustainabil-ity information, not always the disclosed information was valuable for inves-tors and shareholders. Some of the reports were focused on past performance, no strategic information regarding future plans and developments were included into the reports. Risks assessment and actions that are taken to mitigate those risks were not covered in all of the reports and KPIs were not disclosed or ex-plained in the mane reports. (Risk assessment, KPI and strategic objectives, as well as future-oriented narratives are the topics of the most interest for investors as explained in chapter 4).

6. Even though there were quite few references to <IR> framework in the sample re-ports, some useful developments that the framework offers were used by a num-ber of the companies of the sample.

7. Sustainability disclosure was published by all of the sample companies. Prevail-ing majority of the reports used GRI G4 framework that increases comparability of the disclosed information. External assurance and materiality assessment of sus-tainability reports have proven to be a common practice. This factors increase the value of sustainability disclosure for investors.

8. It took from 18 to 64 working days for the companies to produce annual reports, and only five companies managed to publish annual reports within 30 days. On the other hand, there were 8 companies that published annual reports later than 45 days after the end of reporting period (ideally, the annual reports are expected to be published within 15-30 days (ACCA 2013c, 10)

9. The study of future-orientation of the narratives in annual reports revealed that most of the companies had future-oriented content at least in some sections, which means, the companies recognize that such future-oriented content is ex-pected by the key target audience – investors and shareholders.

The analysis revealed that the degree of how well the needs and expectations of investors were met varied from report to report. The next chapter provides more in-depth discussion and recommendations basing on the key findings of the analysis.

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7 Discussion and recommendations

This study was focused on annual reporting as a tool to strengthen corporate reputation among investors and shareholders by providing the information that they are seeking and fulfilling their needs and expectations regarding the format and content of the reports.

Fombrun (1996, in Roper and Fill 2012, 5) defined reputation as “net perception of a com-pany’s ability to meet the expectations of all its stakeholders”. The quality of reporting has a clear linkage with the quality of management in the perception of investment profession-als and proper annual disclosure can directly impact a company’s cost of capital (PwC 2014, 19).

The growing complexity of reporting requirements that comes from the market regulators and authorities creates significant external pressure for the companies that need to com-ply with the new legislation, meet the expectations of the primary target audience of an-nual reports (investors and shareholders), and at the same time keep the reporting con-cise, material, well-structured, and accurate.

The external stakeholders expect the results to be disclosed fast and in a high-quality manner; in addition to the high requirements towards the quality of the content, the reports are expected to be delivered using the modern technological solutions and in accord-ance with the rapidly changing trends of digital design.

The growing complexity of reporting and the tight external deadlines result in higher inter-nal pressure. Changes in regulatory requirements result in the need to optimize interinter-nal reporting mechanisms and set even tighter internal deadlines. However, by demonstrating their ability to produce annual reports in a timely manner, the companies demonstrate effi-cient internal governance mechanisms and ability to perform well under pressure.

As it was discussed in subchapter 4.3.1, annual reports 2016 of the sample companies were also studied in order to observe the trends and developments of corporate reporting practices among Finnish companies. The findings that were presented in chapter 6 are discussed with consideration of the analysis of annual reports 2016 (in addition to consid-eration of the findings of document analysis and literature review) in this chapter.

The results of the study revealed the strong and weak areas of the annual reports of the 25 top-traded companies at the Helsinki Exchange in terms of fulfilling the needs and ex-pectations of investors and shareholders. In this chapter, the results of the research are

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analysed and several ideas to improve the reports to suit the needs of the primary target audience better are presented.

Firstly, an interesting trend that was observed during the research regarding the con-sistency of the reporting practices by sample companies is presented. After that, the for-mats of the annual reports are discussed, and that is followed by the discussion and some recommendations regarding the techniques and design solutions that may facilitate user experience of the primary target audience.

The recommendations regarding the content of voluntary disclosure are provided after-wards, since the analysis revealed that there were very few companies that provided the information that would comply with the needs of the investors. Those recommendations are followed by the discussion of the issues regarding compliance with <IR> framework and recommendations regarding timeframe of the disclosure.