Summary

This chapter discussed the results of the analysis of the sample annual reports using the research matrix, an instrument that was developed as a result of the document analysis that was carried out at the first stage of the study. The analysis was carried out through the prism of the literature studied before carrying out the research and documents that were analysed at the first stage of the research (listed in Appendix 1).

Several general recommendations were given in this chapter to the public companies that produce annual reports: to use interactive PDF format, to interlink content elements and to disclose strategic future-oriented information, including risk assessment, KPIs, etc. (how-ever, cautiously not to disclose sensitive information or too much), to consider compliance with <IR> or at least application of some of useful techniques that the framework provides, to be careful and not to make the reports too long (and to include only material infor-mation), and to try to produce and publish annual reports faster (than in previous years).

136

The next chapter concludes this paper: summarizes the results of the whole study, de-scribes the learning outcomes, discusses limitations of the research and provides sugges-tions for future studies.

137

8 Conclusions

Fombrun (1996, in Roper and Fill 2012, 5) defines reputation as “net perception of a com-pany’s ability to meet the expectations of all its stakeholders”, and this definition leads to conclusion that meeting the needs and expectations of the stakeholders is essential for strong corporate reputation.

The primary target audience of annual reports produced by public companies are current shareholders and investors, as it was justified in subchapter 2.9. Considering that investor image is one of the four images held by external stakeholders that together form corporate reputation (as illustrated in Figure 2, subchapter 2.1.1) and that annual reports are quite often perceived as communication tools that can significantly impact corporate reputation (Argenti 2013, 210; Jonäll & Rimmel 2010, 309; Deloitte 2015a, 5; PwC 2014, 19), it can be concluded that fulfilling the needs and expectations of investors towards annual reports is essential for strong corporate reputation.

The purpose of this study was to come up with specific criteria of a good annual report that would contribute to the company’s image and reputation and provide recommenda-tions on how companies listed at Helsinki Exchange could enhance their annual reports to be the most beneficial for their reputation.

The objectives of the research were to identify the needs and expectations of investors and shareholders as primary stakeholders of annual reports towards the document in questions, analyse how those needs and expectations are currently meet by the compa-nies listed at Helsinki Exchange, and come up with a proposition on how the annual re-ports of publicly listed Finnish companies may or shall be enhanced in order to fulfil the expectations of investors and shareholders and, as a result, contribute positively to corpo-rate reputation. The research objectives were re-formulated into following research sub-questions in subchapter 1.5:

Q1. What are the needs and expectations of investors and shareholders towards an-nual reports of public companies and how they can be fulfilled?

Q2. How well the needs and expectations of investors and shareholders are met in an-nual reports produced by the companies that are listed at Helsinki Exchange?

Q3.How Finnish publicly listed companies could improve their annual reports to better serve the needs and expectations of investors and shareholders and thus contribute positively to corporate reputation?

138

During this study, the needs and expectations of investors and shareholders towards an-nual reports produced by public companies were identified through the document analy-sis; the documents are listed in Appendix 1. The findings are discussed throughout chap-ter 4, thus providing an answer to the Q1. Basing on the findings of the analysis, there was a research matrix developed (Appendix 3). Research matrix is an instrument that combines the most important criteria of investors towards annual reports and allows to as-sess whether a report provides sufficient information, whether it was published in a format that is convenient to work with, and whether it qualifies with other criteria of the primary target audience (the criteria are described in chapter 5). The research matrix is universal and can be used to analyse any annual report of a public company.

Using the research matrix that was developed at the first stage of the research, annual re-ports 2015 of 25 companies that were traded the most at Helsinki Exchange and thus con-stituted OMXH25 index in spring 2016 were carefully analysed in order to build and under-standing of the corporate reporting practices in Finland. In particular, the objective of the analysis was to assess how well the annual reports fulfil the needs and expectations of the investors and how the reporting practices can be improved to minimize the gap be-tween the expectations of the investors and the annual reports, and as a result, to make annual reports efficient communication tools that enhance corporate reputation. The re-sults of the research are presented in chapter 6 and discussed more in-depth in relation to investors’ expectations and needs in chapter 7, thus providing answers to R2 and R3 cor-respondingly. Annual reports 2016 that were produced by the sample companies were also studied and taken into consideration when making conclusions and providing recom-mendations in chapter 7.

Overall, it has turned out that corporate reporting practices vary significantly from com-pany to comcom-pany. Some of the reports turned out to be very close to what is expected by the investors, whilst voluntary disclosure of other companies was very minimalistic and mostly focused on the previous achievements, thus not providing the information that is wanted by investors.

There were significant differences not only in terms of content of annual reports, but also in terms of format, timing, compliance with reporting frameworks and external assurance (the study was focused on voluntary reporting, compliance with mandatory reporting framework (IFRS) and assurance of financial statements was not the focus of this study).

139

In general it has turned out that many reports do fulfil the needs and expectations of in-vestors rather well, however, there was something that can be improved almost in every report. All the data that was collected during the second stage of the research is available from Appendixes 3-12.

At this point it is also important to mention once again the point that was briefly referred to in subchapters 7.3 and 7.7. Even though investors do want access to strategic information and future plans of the companies, in many cases it can be rather sensitive information, and revealing too much information may have negative effect on business operations. All information that is included into annual reports shall be carefully weighted.

Basing on the results of the study, seven principles for creating a report that would fulfil the needs and expectations of investors were identified and are summarized in the next subchapter. By following such principles, companies can produce annual reports that fulfil the needs and expectations of the investors, and as a result, positively impact corporate reputation.