How will the year stack up?
I’m a member of an exclusive group. Not exclusive in terms of elite, cool or aspirational; more like exclusive in a ‘not many people care to belong’ way.
The commonality is a deep and vaguely disturbing love of annual reports, most particularly those of the sustainability or triple bottom line variety. For us few souls in this report-happy land, September is an exciting time of year because it is reporting season.
Printers are working overtime and designers are putting the final touches to the website versions of these reports. Photographers await the call to replace the random photo that someone wishing to wield power inevitably demands to be changed at the last minute.
The writers are panicking quietly that someone will fiddle with the edit process and create an inaccuracy, while the proofreaders check that the correct age is against each director’s bio.
To the non-believers who bemoan the annual report as a boring job that has to be done, a document that no one reads and an all-too-regular-pain that takes up inordinate time, money, people and energy, I say pffft.
The delicious irony of the admittedly limited annual report readership is that the people who do read these lengthy tomes are the people most important to the organisation. The board, CEO, executive team, staff, investors, competitors and media comprise the committed team of scrutineers. Everyone who reads it is interested and potentially highly critical.
I see an annual report as the CEO’s resume for the past 12 months. As such, it is typically of great significance to the leadership team. In signing off the financial statements, the board of directors – or at the very least the Chair – also understands that this role, and the responsibility it carries, is not to be taken lightly.
As the legally compliant report of whether an organisation is meeting its goals, this document holds a wealth of information. And it must be able to withstand intense scrutiny.
Put simply, it’s the crunch point for accountability.
The hallmarks of good reporting are clarity and transparency. So annual reports should be easy to navigate, with challenges and mistakes discussed as readily as highlights and achievements. There should also be five years of comparative data.
Sustainability, or triple bottom line, reporting ensures that traditional financial results are considered alongside environmental and social performance. It’s not OK to just focus on making money for shareholders (even when the government is the shareholder) at the expense of communities and our natural environment.
The benchmark for sustainability reporting is the Global Reporting Initiative (GRI). The GRI framework reflects world standards on issues ranging from human rights to water management, legacy obligations to governance, staff turnover to greenhouse gas emissions. The approach is ‘comply or explain’, which means reporting against the set of standard indicators and explaining if/when a target isn’t met or measured.
The world’s biggest corporations, including Australian-based giants NAB and BHP Billiton, provide best practice GRI-based reports. Geelong hosts many large government and shareholder-driven organisations, so there is good local reading on offer. Indeed Shell set the sustainability reporting standard more than a dozen years ago.
Perhaps more topical, in terms of accountability, is the City of Greater Geelong. While not GRI-based, our council’s annual report refers back to targets set out in the City Plan.
Delving into last year’s detail, I’ve found some curious anomalies and what I consider soft targets. Committing to respond to only 80% of correspondence within 10 days seems to set the bar relatively low in the City Plan. Interestingly, the target used to be 100%’but last year’s result was only 71%. Is dropping the target the best answer?
The 2011-12 CoGG report omitted many results due to ‘data not available’ or because surveys were not conducted. There were also many missed targets (11 out of 13 targets were not met in Managed Growth) and some questionable results printed as successes. For example, the rather odd target of 5,000 persons per day using the Geelong Train Station by 2025 was considered ‘met’ with a result of approximately 1,930 persons per day in 2011-12.
Good people are everywhere doing great work and I find most people welcome transparent reporting. But obscurity around performance reporting is not a good look when there is dissatisfaction expressed by the community.
If an organisation’s performance is under question, a clear and meaningful plan is an intelligent starting point and an honest report must follow up for true accountability.
Despite great hopes under a new team, the City Plan released in May is disappointing. It is essentially the same four-year plan from 2008, with cosmetic changes. Littered with motherhood statements, unmeasurable objectives and meaningless data, I see a wasted opportunity.
The annual report is due on 30 September. Will it show spin or accountability?