5 Steps to Write a CEO’s Annual Report

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Even though we’re just at the start of 2021, very soon, you, as an executive, will have to start planning your CEO’s annual report.

The preparation of this report should start in advance. There’s so much going on in your business, and you should continuously track the results and include them in your final message. 

So, since it soon will be high time to start preparing your CEO’s annual report, we’ll take a closer look at the components this report should include. 

The Goal and Characteristics of CEO’s Annual Report

Before we get to the practical part, let’s get to the bottom of the CEO’s annual report, the forms it can take, and what characterizes a good report. 

A CEO’s annual report is a document that gives an update regarding an organization’s performance over the previous year. This report covers the activities that the company engaged in during this year and the results that these activities brought along. 

What Are the Features of a Good CEO’s Annual Report?

To effectively cover all the essentials, a CEO’s annual report should possess a set of qualities: 

  • treats the target audience as partners, not subordinates, uses the respective style and tone
  • addresses both achievements and weaknesses
  • provides details on key performance metrics to support the claims
  • gives insights into qualitative metrics such as corporate culture
  • highlights the contribution of employees

A frequent mistake that executives make when writing an annual report is making it sound too promotional and skipping the company’s obstacles over the year. However, you can make these obstacles a key point of your annual report and focus on how you plan to overcome them in the upcoming year. 

What Are the Typical Annual Report Formats?

You can deliver a CEO’s annual report in the following formats:

  • Printed. The physical copies are distributed among the shareholders, media members, sometimes among the government officials, and for PR purposes. 
  • Electronic. The electronic copy is uploaded to the company’s website and can also be shared via the company’s social platforms, like LinkedIn. 
  • Interactive. Although it’s a very rare one, an interactive copy can come in the format of a scannable e-book or even have its own landing page containing videos, interactive charts, and infographics. 

Try to choose your report’s format based on how you usually communicate with the target audience for whom this report is intended. 

Why Is a CEO’s Annual Report Important?

A CEO’s annual report typically has the following goals:

  • sharing the decision-maker’s position regarding the company’s growth
  • highlighting the company’s key achievements
  • introducing the top-performing employees to the stakeholders
  • providing information on the company’s financial situation
  • covering the top management’s plans for the upcoming year

These goals also define the structure of a CEO’s annual report. Now, let’s take a closer look at how to write it. 

1. Start by Figuring Out the Audience to Address

CEO’s annual reports usually focus on:

  • employees
  • stakeholders

The choice of the target audience for your annual report will impact its structure. For instance, if your report is intended for your employees, you can omit the financial details. 

Meanwhile, a financial report is a must-have if your annual report will target stakeholders. Apart from that, an annual report intended for the stakeholders should comply with the requirements imposed by your government’s Securities and Exchange Commission to make sure that you don’t share sensitive financial information. 

A CEO’s annual report typically starts with addressing the target audience directly. For instance, here’s an example of such a report from Wells Fargo, which addresses the stakeholders (we’ll use this report as a reference later on in the article):

In this case, the CEO addresses stakeholders as owners. You can address employees as staff to generalize your message. But make sure that it’s clear from the beginning who your annual report is targeting. 

2. Review Important Events and Milestones

We already touched upon the importance of tracking the key achievements and milestones throughout the year. Once you’re ready to write your annual report, give these events one final overview to make sure you don’t miss anything. 

At this point, you can also list your achievements in several different ways:

  • Monthly – outline the achievements that characterized each month of the year.
  • By milestone – enumerate all milestones and mention the achievements associated with them. 
  • By individual achievement – mention the names of the employees and their individual successes.

The last report structure variant is great if you want to boost employee morale and recognize your employee’s achievements. In general, regardless of the format you’ll choose, try to mention the names of the employees who have contributed the most to your company’s success over the past year. 

How long should this part be?

A CEO’s annual report can list the major achievements in the introduction right after addressing the target audience. However, the details on these achievements are usually described in the business profile part. 

3. Outline the Business Profile

Also known as a business performance overview, the business profile is a part of a CEO’s annual report that touches upon the company’s mission statement, details about the board of managers, employees, and products or services that are the main sources of revenue. 

The business profile part also provides details on the key milestones and how they were (or were not) accomplished. At this point, try to dedicate each paragraph of this section to different milestones not to confuse the readers. Here’s how Wells Fargo CEO did it in his annual report:

As you can see, one of the goals of the company was to rebuild trust. One milestone (the first highlighted paragraph) was to rebuild trust with customers, and another milestone (the second highlighted paragraph) was to re-establish trust with the Wells Fargo team. 

So, try to mention one milestone per paragraph, and it’s normal if they come out a bit long (you can see it in the example above). However, make sure your text is still readable. Try to write shorter sentences, and check the overall readability with tools like Get Good Grade, Hemingway App, or any online writing service once you’re done. 

The business profile section also includes every underachievement and goal that your company failed to accomplish over the past year. This information is especially important for the stakeholders because it helps them better understand whether the company needs more resources to accomplish these goals. 

When describing the failed goals, try to focus on:

  • the initial intent behind these goals
  • the reason why you failed, such as lack of resources, not enough time, and so on
  • how you are planning to achieve these goals in the upcoming year

To avoid baseless claims, support your plans with some real-life data, but also show that you’re open to suggestions from your employees or stakeholders. 

4. Provide Financial Overview

The next step in writing a CEO’s annual report in drafting the financial overview. As we already mentioned, this information in the report depends on whether the company is public or private. If your report is intended only for your employees, you can skip this part. 

However, if your report will address the shareholders, it should include a statement on the financial overview of the past year. And this section should focus on accuracy, thorough reporting, and transparency, all based on specific real-life data. 

The financial overview part usually has the following structure:

  • income statement
  • company balance sheet
  • equity statement
  • cash flow statement
  • the statement with earnings per share
  • the market price of your company shares

Consider the financial overview from our Wells Fargo example:

As you can see, the financial report starts with the general revenue received in 2016, how it increased from 2015, net income, and diluted earnings per share. Then the report proceeds to the statement on the company’s assets, the credit quality of the company’s portfolio, and, finally, with the report on total equity. 

The financial overview section can also include the auditor’s report on the company’s current financial state and the analysis of future growth. 

5. Conclude With the Outlook for the Future

Lastly, you can end your CEO’s annual report on a positive note and share some prospects and plans for the future. You can break down this section according to the milestones you’re going to work on in the upcoming year. 

In this section, it is important to focus on what has already been done to lay the groundwork for these milestones and what you plan to do next. Take a look at how the Wells Fargo CEO’s report handles this section:

In this particular subsection, the CEO is talking about the milestone of creating more economic opportunities. He shared that the company has already invested in some programs to achieve that milestone. Still, there’s also information on how the company was planning to continue supporting this milestone in the upcoming year. 

At this point, make sure to support your plans with clear evidence. In the example above, you can see that the CEO uses exact numbers to prove his intentions. You can do the same using the data that justifies the milestones you’ve set to achieve. 

Finally, you can conclude your CEO’s annual report with a key message that sums up the statements you’ve made. Here, it is important to maintain the same style throughout the report – be realistic rather than overly optimistic. 

For instance, in our Wells Fargo example, the CEO expresses hope for a more successful upcoming year while also acknowledging the challenges that might come along:

If you’re making any references in your report, include the list of them at the end. Your stakeholders might want to have a closer look at them to better understand the logic behind your statements. 

Writing a CEO’s Annual Report: Topic Recap

Preparing a CEO’s annual report is a lot of work. You have to start working on it way in advance to collect all the necessary data and to make sure all the milestones are included. 

Hopefully, your guide will be of great help to you when writing your annual report. And, if you’re in a hurry, here’s a quick recap of all the tips for you:

  • Determine your target audience. Choose whether your report will focus on employees or stakeholders. This choice will determine the structure of your report (e.g., whether a financial overview will be there or not). 
  • Review important events and milestones. Make sure you include all the milestones you did and didn’t achieve to provide a realistic picture of your company’s accomplishments. 
  • Outline the business profile. This is the part where you introduce your business, its key players and include a more detailed overview of all the milestones. 
  • Provide a financial overview. If your report is intended for the stakeholders, share data-based financial information and keep your overview transparent. 
  • Finalize your report with an outlook for the future. Describe the milestones you’re planning to achieve and what has already been done to successfully complete them. 

Finally, watch the style of your report. It shouldn’t be too promotional. Instead, your report should give realistic expectations while also providing real-life data to support your statements. 

 

Author’s Bio

Jessica Fender is a professional writer and educational blogger. Jessica enjoys sharing her ideas to make writing and learning fun.

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