Tue, 29 May 2007 07:55:47 GMT
Latest NewsCompanies Failing to Exploit Internet
Companies are failing to take advantage of the unique opportunities the internet offers for communicating with shareholders, in spite of lobbying long and hard for the privilege, according to a survey of FTSE 100 companies.
The survey found it was often difficult to search the information provided online by large companies.
Most FTSE 100 companies put their annual reports online in large PDF files that were slow to open or download. Only a minority used the interactivity of the internet to help users find information and to attract the interest of investors.
Jonathan Hynes of Smith Partnership, the business communications consultancy that carried out the survey, said companies had campaigned to be allowed to take advantage of the savings in paper and money.
"You'd think the long-awaited revisions to the Companies Act that allow them to supply their annual reports to shareholders via their websites would be embraced with enthusiasm and vigour. Not so, however."
The survey rated Aviva's online report as the best among the 94 FTSE 100 companies that have reported so far this year. The financial services group not only had the most "best practice" features recommended by the Investor Relations Society, but also engaged with readers in a compelling way.
BP, the energy group that was last year's winner, slipped to fifth place in 2006 because its consistent online presence had not advanced.
DSG International, owner of Currys and PC World, was rated bottom with "a numbing 128 pages in a single download". Second from bottom was BA which provided a single 110-page PDF file.
"Investors have told us that the way in which the annual report is portrayed online affects their image of the company," said Mr Hynes. "They don't want to give up the print versions yet, but they can be encouraged to go online if they can see the value of the interactivity possible on websites."
The survey found that in some cases it took several minutes to find information such as the chief executive's remuneration. Just 42 of the companies offered annual reports in the searchable HTML format and only 13 provided financial data that could be downloaded in spreadsheet format.
The IRS recommends that PDF files be provided for readers who want to download or print out the whole report. But the survey found only half divided them into convenient sections - in many cases it would have been quicker to thumb through the printed report.
In addition to rating the online annual reports on the IRS "best practice" features, the survey also assessed their design and layout to see if they reflected the different ways that users found information online.
Only a quarter of the companies provided encouraging navigation and just 20 used their brand to differentiate them from their competitors.
Mr Hynes said he could understand that after weeks of preparing the printed annual report, companies might be reluctant to reorganise the information for an online version. He said: "A simple PDF file, exactly as it was printed, is cheap, easy and does not have to be vetted all over again by the auditors. But the best companies are engaging their shareholders and using online reporting to present their side of the story in a different way. It's not that expensive to do."
Source: By John Willman - FT.com