It's arguable that my chosen career path requires a passion for words (and, some might say, verbosity) but despite being a self-confessed user of more words than are strictly necessary on occasion (and also a book lover), even I can see that listed companies' propensity to publish ever longer annual reports is neither sensible or helpful.
Yes, it is important for companies to document, disclose, justify and publicise their actions and decisions, but the manpower involved in writing, reviewing and amending hundreds of pages of annual report could surely be better used on other projects. Writing reams about ESG, for example, doesn't actually result in a company taking any positive steps in that area. The Quoted Companies Alliance (QCA), in its recent research about annual reports, also makes the point that it is not just Main Market companies that are producing these epic tomes; smaller companies listed on AIM are crafting ever-longer annual reports too and it is these companies which are likely to have fewer resources than their FTSE-quoted cousins.
I'm not suggesting that this is the sole fault of the companies in question. The reporting requirements for publicly listed companies are not for the faint-hearted and covering off everything in an annual report is a daunting task. The QCA certainly thinks so and has called for an "overhauling of current reporting demands and better guidance".
Disclosure should, of course, be taken seriously but length doesn't denote quality and can result in the exact opposite. Clear and succinct disclosure surely has to be the preferred option, not only for the company, but also for its investors and other stakeholders.
So, perhaps that guidance should suggest aiming for Animal Farm, rather than Lord of the Rings...
At 147,000 words or 237 pages, the average FTSE 100 annual report is longer than epic novels such as A Tale of Two Cities and One Hundred Years of Solitude
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