How to Write a CEO's Annual Report
Annual reports present a prime opportunity for a business to enhance its public image. A well-written report supplies a high level of operational and financial transparency to government agencies, shareholders, customers and the general public. Public companies have a legal requirement to file an annual report, according to federal and state regulations. Private companies have neither federal nor state compliance regulations they must follow, but often use an annual report to document their businesses' commitment to being good citizens and as a tool for generating goodwill.
The structure and formality of an annual report depend on the target audience and whether there are federal and state reporting requirements. Public companies must adhere to a more formal report structure to comply with state and federal regulatory agencies' reporting requirements. Formal annual reports have an introduction, sales and marketing overviews, and a financial reporting section. Privately held companies intending to make annual report information public often follow a similar structure, but may include a section devoted to generating goodwill, presenting information in a less formal manner.
Start an annual report by giving readers an overview of the company. Include the company’s mission statement of purpose and a brief company history. The CEO or business owner should include a one- to two-page personal message that outlines business activities for the previous year and discusses goals and objectives the company achieved, as well as those in which the company fell short. The introduction section ends with an overview contributed by the marketing department that highlights key sources of sales revenue and identifies revenue-generating activities.
The financial section of an annual report depends on whether the business is public or private. Public companies with shareholders need to include current and historic stock price information for the previous 10 years. Public companies must -- and private companies can -- include a statement in which a member of the management team reveals the current financial condition of the company and compares current performance with financial trends for the previous two years. Both should include company financial statements such as an income statement, balance sheet and cash flow statement.
The main difference between a more formal and less formal report lies in the amount of optional information the report contains. A private company often devotes large amounts of space to outlining ethical and goodwill objectives. Most include photographic evidence, documentation such as awards and certificates, and a shout-out to employees who supported company goodwill objectives over the previous year. Many end on a motivational note with an enthusiastic commitment to continued and increasing involvement in community activities during the coming year.