Who Reads This Stuff?
06 May 2009
As the IRO of a publicly traded company, you may be tasked with producing the annual report every year. Have you ever wondered who actually reads that annual report? After all, the bulk of an annual report these days is historical information that has already been made available to the public.
I can tell you one thing – sell-side financial analysts certainly aren’t waiting in line to receive their copy, hot off the press.
How do I know that? I recently embarked on a scientific initiative that studied the topic. I called the scientific initiative “Let’s ask a bunch of analysts if they actually read annual reports”. Impressive, isn’t it?
I asked 24 analysts, who cover various sectors, if they actually read the annual reports of the companies that they cover.
8 out of the 24 admitted that they don’t refer to the annual report at all. A whopping one third! And that’s only the analysts who would admit it. The vast majority of the remaining analysts mentioned that they only “skim” the annual report for any new or relevant information.
Something to keep in mind the next time you are evaluating the time, energy, and money spent on your annual report.