February 17, 2021 Corporate reporting: It’s time to get virtual
Comply or explain, enabling investors to build up a full picture of the current and future direction of the organisation, engaging with a wider audience; the annual report sits at the heart of corporate communications. The format may be slightly circumscribed by legal or procedural requirements. Nevertheless there is plenty of scope for organisations to use their statutory reports to clothe basic accounting or legal information with the culture and ambitions of the organisation.
But what is the best medium for reporting? Over recent years companies have increasingly adopted online reporting in a bid to cut down on paper and speed up engagement. Many of these online reports are virtually indistinguishable from a paper model; using the same format and layout. Now questions are being asked about whether companies could do more by using the power of technological developments to engage further with investors and others.
Enter the world of virtual and augmented reality. Already used by some organisations in areas such as manufacturing, training or gaming problems; virtual or augmented reality technologies enable the delivery of an immersive experience through the use of techniques including sound engineering, motion tracking and animation. This has led the FRC’s Financial Reporting Lab to take a look at how virtual or augmented reality (VR&AR) methods could enhance corporate reports.
Their review identified three approaches currently in use by some organisations. The first makes use of QR codes within the report to provide access to further information; perhaps by linking to a video or suite of graphs. Using QR codes does have the merit of enabling paper reports to link to online information but overuse could lead to confusion as readers bounce between codes and the paper report.
The second method takes online information to the next level with 360° or virtual reality views of the report. The Lab notes that these can prove to be an engaging way of viewing company reporting especially when based on themes. Taking this one step further, some organisations are looking at delivering fully virtual reports. These enable users to interact with a mix of video, photo, and text content which links back to the fuller annual report.
Moving forward the Lab envisages a time in which a fully virtual report could not only tell the story of a single year but also demonstrate through videos and moving images how a company has evolved across time. This they say would meet the need regularly highlighted by investors for comparative information over several years in order to help them to predict the company’s future.