Michael A. Rosenbaum, in his book Selling Your Story to Wall Street , says, “The annual report is singularly the best opportunity and vehicle the investor-relations executive can use to define and deliver the investment message.”

Not only is the annual report the best way to share management’s vision and strategy with investors, it also is a powerful marketing tool to reach customers, employees, the community and industry peers. Here are some tips on how best to plan, structure and write an annual report.

Planning is Paramount

When kicking off the annual report process, start with this fundamental question: Why should I invest in this company? Your goal for the annual report should be to answer this question simply and clearly.

Begin by laying out management’s vision for the company. The annual report must clearly communicate not only where the company has been but where it is going and how it is going to get there. Investors are more interested in the future than the past. As such, you should provide a brief review of the year’s results and then focus the rest of the report on discussing the future.

The theme or concept of the report should illustrate this vision. Build your key messages around the theme so that they provide a link between the vision and management’s business goals. In this way you can demonstrate how achieving these goals will lead to achieving the vision management has for the company.

The company’s financial performance then becomes the proof points that show the company’s success in achieving its vision. Use milestones as a way to demonstrate the company’s progress over time, such as meeting stated targets for EPS, net income, deposit or loan growth, geographic expansion, etc. This also will allow you to link the annual reports from year to year and deliver a clear, consistent message over time to your key audiences.

Define your key messages by identifying the “must talk about” messages, the “could talk about” messages and the “don’t talk about” messages. Write down the internal and external elements that helped shaped your company’s performance, and then pinpoint the actions that were/are being initiated in response to these elements. Also, consider the point of view of your key stakeholders and identify key messages specific for each audience.

Structuring & Writing

Once you have a theme and overall key messages established, the first place to begin writing is the CEO’s letter to shareholders. This typically is the most read and remembered piece of the annual report. It is imperative that the letter be a concise summary of what you want to communicate to your stakeholders.

The narrative sections that follow (if you are not doing a 10-K wrap) should support and provide more detail about the statements made in the CEO letter. Many companies use customer profiles for this purpose, because they are a great way to illustrate how the company builds relationships and delivers key benefits to its customers – typically key elements of a company’s vision.

The written copy for all sections of the report should be simple, straightforward, frank and honest. The annual report is one of the best vehicles a company has to build credibility with its stakeholders. Do not sugarcoat or avoid bad news; doing so will detract from your company’s credibility.

Write in “plain English” as the Securities and Exchange Commission (SEC) recommends, so that even the most novice investor will understand what you are trying to communicate. Follow the guidelines established by professional organizations such as the National Association of Investors Corp. (NAIC), the National Investor Relations Institute (NIRI) and the American Association of Individual Investors (AAII).

Working with the Pros

If you are strapped for time and internal resources, have a professional writer facilitate the planning and research, write the report and manage the overall project. This will ensure that you maximize the quality and the strategic opportunity inherent in your annual report. An experienced writer – especially one who specializes in your industry – will be able to take management’s vision, goals and aspirations and turn them into powerful themes, key messages and copy that will capture the essence of the company and interest readers.

In addition, make sure that you and/or the project manager works hand in hand with those in charge of creative design for the annual report throughout the planning process. Include the creative team in each step of the process, so that they are in synch with your thinking. This will help them translate the concepts into the images, look and feel of the report.

To view samples of bank annual reports MarshComm has written, please click here.