Salterbaxter - Directions Supplement - A New Dawn In Corporate Reporting

DIRECTIONS SUPPLEMENT MAY/JUNE 08

TRENDS AND ISSUES IN THE WORLD OF CORPORATE REPORTING

A few years from now in a galaxy not too far away…

Has the challenge really changed or is it about how form meets content in a new online world?

Tony Manwaring Chief Executive Tomorrow’s Company

Last week, I was with the CEO of a leading property company, long-standing supporters of Tomorrow’s Company. He had just received an independent analyst’s report rating the performance of his company best in class. He produces a fabulously well designed corporate report, a glorious coffee table work of art. But he is the first to say that what matters is walking his investors around London, giving them a clear ‘line of sight’ with what he is doing with their money on the street. In so doing, he shows them what he means by success: a definition which goes well beyond cutting costs much less cutting corners, and invests in the quality of the buildings, and the variety, life and dynamism of those who live, work and visit that urban space.

The challenge is largely what it has always been. To tell a compelling story, which says what is being done, why and how, backs this up with evidence, and shows what is distinctive; which builds on previous reports, to ensure consistency, and uses long-term indicators; which above all is framed by what we call the virtuous circle of governance – mapping the company’s purpose, vision and values, setting out its key relationships, laying out its model for business success, and only then talks ‘KPIs’. But yes, there are new challenges and opportunities. They are about content – achieving sustainability outcomes, the probability that carbon emissions reporting will become mandatory for quoted companies for example. And form – electronic reports available through multi-channel media, but not if it is just an e-copy of the paper document, and only if it is user-friendly. It is the difference between a video and a great special edition DVD. What is really different is what happens when form meets content in our new Web 3.0 world. Is there evidence of strategic transformation so that value is created which is profitable and contributes to ‘one planet’ living? Are stories being told in our 24/7 flat-world continuously, so that the next annual report is today’s edition? Are stakeholders being truly respected as consumers, investors, employees and citizens able to see through the corporate walls? The opportunity and challenge are one and the same: to create a real-time dialogue with as much intimacy and integrity as the CEO whose story I started with.

Directions Supplement May / June 08

Welcome to the May/June edition of Directions Supplement – a look into the future. Have you been rather bored by the endless debates around online corporate reporting? The pros and cons of html over PDF and the technicalities? Now it’s not that the current debate around online reporting isn’t important – it absolutely is. It’s just that as far as we can see it’s actually not as difficult and radical as some people make out. Surely it’s just about delivery channels and getting better information to the right people more effectively? No rocket science in that as far as we’re aware. And we think a lot of the debate is missing the point. For us, the point is the longer term picture where companies’ communications with stakeholders become truly dialogue based and start to use the real potential of the internet rather than just using it as a place to put the same old information in a slightly different format. If you’ve only just woken up to the concept of Web 2.0 then I’m afraid you need to move faster – the interesting stuff will happen with Web 3.0 – and this is what the cutting edge companies are spotting. So rather than keeping the debate about online reporting turning in ever decreasing circles we’ve used this edition of Directions to star gaze a little. We’ve asked Aviva, E.ON and Tomorrow’s Company to help us look into a galaxy not too far away, a few years from now, and to tell us what they see as the most likely developments in online corporate stakeholder communication. Light sabres at the ready – will the world of communications be turned upside down? Will the forces of conservatism prevail or will the valiant champions of innovation and imagination win through? Or will Web 3.0 turn out to be a Jedi mind trick?

Our predictions When we consider the future of the web and specifically stakeholder communications, it’s sobering to take a look at the reality of web users and their browsing habits. The latest report into this area by usability guru Jacob Nielson shows people are becoming much less patient when they go online. No longer willing to investigate websites, many users simply want to reach a site quickly, complete a task and leave. Most will ignore or are even suspicious of efforts to hold their attention. The single best piece of advice we can give is to engage and invest in the social media revolution. Your story will be told in the forums and chatrooms, the blogs and the Podcasts (whether you like it or not!). So make sure you take part.

Nigel Salter Director salterbaxter

Some specifics > Prepare yourselves to live without the annual financial statements cycle. You’ll need to move from 6 monthly or quarterly communications to constant two way dialogue. > Heard of a ‘cloud’ yet? Well you’ll probably be needing an investor community cloud sometime soon. > And in the old world of annual reporting, we think there’ll still be a need for some printed documents. But we would put a small bet on the document being called a ‘stakeholder report’ – the main report will be held online and will be linked to a digital print-on-demand facility at the printers – so no wasted copies.

Watch out, the Wii tennis-playing generation is here and getting pickier. They will hit the ball into our side of the court, faster and faster. How are we going to return it? Aviva, the world’s fifth-largest insurance group and largest insurance services provider in the UK has 57,000 employees in 27 countries serving around 45 million customers. So a boring old insurance company then? Well you might think that but perhaps it’s fair to ask you to think again. Stuart Bartram Senior Manager, Corporate Internet and Design Aviva

“How are we going to respond to those needs from these ‘digital natives’?”

At a corporate level we have been keen to improve our internet presence, not only to support our developing brand but more importantly to make sure we meet the differing needs of our growing audiences. Corporate websites nowadays are big and getting bigger. Aviva.com itself has more than 12,000 pages. A great resource for all you need to know about Aviva. A whole stack of content from text to movies. Our audiences stretch from analysts and shareholders to jobseekers and an ever-increasing number of worldwide customers. But in meeting these differing user needs are we in danger of losing control of the corporate message? We believe not, the next few years will be more about offering users different choices of viewing and engaging with content rather than new, different content. Web 2.0 has been around for a little while now and we are beginning to see it move into the corporate webspace and at Aviva we have been early adopters. We believe using these initiatives gives us the chance to engage all these audiences to provide meaningful online experiences and get across key Plc messages. We were among the first, if not the first FTSE 100 company, to have a mobile version of key investor relations content to help users keep in touch with us when they are on the move. It first saw light of day in 2002. You can access it on a PDA or mobile phone at www.aviva.com/mobile We tend to trial a number of Web 2.0 technologies via a kind of ‘hothouse lab’ type experiment where we plant these initiatives in some of our other sites and then monitor the use. We run two campaign sites, www.avivaoceanracing.com, to support Aviva’s sponsorship of yachtswoman Dee Caffari, and

www.six-steps.org, our financial education website. Both these contain a whole range of Web 2.0 stuff – personalisation, blogs, embedded video, RSS – all designed to meet the needs of building online communities. Some key elements of this have now launched on www.aviva.com. As part of our newly built investor centre, we offered a tool which enables users to keep their personalised content choices, subscribe to RSS feeds, manage their shareholding and view embedded management interviews and brand communication videos. Surprised at the rate of sign-up for this, thousands rather than hundreds, six months down the line we can begin to look at the usage stats to determine whether this is a novelty or it has longer lasting benefits for users. In short, how often do they use it and what for? At Aviva we are keen on offering choice to our users, as we understand and recognise that increasingly they all have different needs. I often draw on my own day-to-day life in thinking about this. As a single customer of my bank I have multiple, complex demands. That leads me to think about what we do in the online world each day and what we should be doing in the future to ensure we cater for these kind of demands. How are we going to respond to those needs from these ‘digital natives’? Walk into any school or home now and you can see the rise of digital technology in the everyday lives of young people. Watch them use it, often several things at the same time. Watch out the Wii tennis-playing generation is here and getting pickier. They will hit the ball into our side of the court, faster and faster. How are we going to return it? Key points for the future: > individual choice – we will all need to find ways to provide individuals with the information they want, in the format they want, at the time they want > experiment – be prepared to have to trial and research lots of ideas to identify which work best > dialogue – corporate communications will be about conversations, not publications.

Corporate communications from the inside out

Paul Squires Online and New Media Manager E.ON

“ This is a highly important activity where the company can both embrace and educate its employees regarding social media.”

Ubiquitous, open, and democratic social networks and media are gaining massive popularity. They have the power to transform corporate reputation in the blink of an eye – without any formal communications transaction having taken place. The challenge for companies is how to be part of these transactions without forcing the issue, or indeed to try to start conversations on their terms and in their context. Turning up to an ultra-trendy club in a suit and tie will probably look out of place. This principle is brought even more into focus online. At least the smart suit-wearer can leave the club, never to return (at least in the same clothes); poor attempts to communicate within social media networks remain largely permanent. This danger has two aspects; firstly, there is, of course, the short-term embarrassment within corporate communications departments that the project has gone wrong, for all to see. Secondly, and more importantly, it puts any future social media activity into jeopardy, with earlier failed projects casting a long shadow in communities that matter. We are all aware of the ghostwritten blog which was rumbled, or the Wikipedia entry which was too heavily modified. Although coverage of ghostwritten blogs has been largely US-focussed, the spotlight will now shift to the UK, where the Consumer Protection from Unfair Trading Regulations now prevent social media content from being published without the publisher identifying their relationship with the brand. As Facebook, Youtube and blogging have become firmly embedded in the public psyche, many larger companies have struggled to come to terms with them. However, with a reasonable degree of trust, foresight and pragmatism, combined with total support on both a strategic and operational level, companies can utilise social media and social networking to the advantage of everyone.

My advice is as follows; firstly, work with existing online communities, and spend time – as much time as you feel comfortable – listening to what they are saying; secondly, try to cross-reference key sites and discussions with your stakeholder group. Do not make the assumption that your stakeholders – however ‘corporate’ – are completely detached from social media. They are part of your journey too, and if they are not ‘on the bus’ already, then educate them – and everyone will gain from your advice in how to play a part. At E.ON, we have taken both of these points on board, in the delivery of what are the initial phases of our social media activity. A very useful activity prior to the launch of our regular Podcast was for me to stand up in front of a group of Podcast professionals and ask them what they thought of our strategy. The result is that we now have a new Podcast available every three weeks which reflects a diverse range of subjects, produced in-house in an accessible style which attracts a wide range of stakeholders and audiences. What we haven’t done is actively promote the Podcast – it is something which our audiences in these fields need to take and adopt as their own; bringing with it the more human side of delivering reputational success. The democratic role that a social network can take means that companies need to be highly ‘sensory’. The role – and indeed the power – which a company employee has online, is theoretically equal to that of the company itself. Again, although it presents a potential threat, this is a highly important activity where the company can both embrace and educate its employees regarding social media, in two ways: firstly, regarding its own social media strategy; and secondly, the framework by which it expects employees to refer to the company – and refer to their own employment within it. All of this provides a significant opportunity for corporate websites. It’s perhaps a relief to note that they won’t change overnight. However, their role within corporate communications will change, and they will both complement corporate social media activity, as well as find themselves containing more ‘social’ features going forward. The recently-launched Social Media Release format for press releases is certainly an attempt at formalising such activities for journalists. In conclusion, corporate communications is starting to change into something more fundamentally two-way, democratic, and conscious of the web around it. The challenge for companies is to be aware – in perpetuity – of this, and to execute strategies which take advantage of the innate sociability of the web in a pragmatic way that delivers benefit for the full range of stakeholders, and beyond.

About us Contact: Lucie Harrild [email protected] Tel: +44 (0)20 7229 5720 Pavan Athwal [email protected] Tel: +44 (0)20 7229 5720 The Directions Supplements support our main Directions report and are produced every two months. The main Directions report is published each year and is now regarded as the UK’s most comprehensive analysis of the trends and issues in CR communications. If you want a copy, call us on the number below or email [email protected]

Salterbaxter advise companies on branding, corporate responsibility, corporate reporting and employee engagement. We name companies, re-invent companies, re-position companies and re-brand companies. We help companies communicate with shareholders and their employees and we advise them on how to address corporate responsibility. We create brands, complete company communications programmes and global guidelines. We design, build and manage websites, e-commerce sites and all things interactive. We develop climate change campaigns and bring sustainability to life. In short we apply creative thinking to the big issues that businesses have to address in order to improve performance.

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