All the newscasters are saying horrible things are in store for business and industry and people like me—because of the Y2K problem. Is this something I need to worry about?

S.C.: The Y2K problem involves what may happen to many computers when the calendar moves from Dec. 31, 1999, to—hopefully, Jan. 1, 2000. But many (if not most) computers won't make the transition painlessly. Their clocks will revert to Jan. 1, 1900. Companies are required to include reference in their Management's Discussion & Analysis of Operations (MD&A) as to the cost, actual or anticipated, of correcting their respective Y2K problem. First off, annual report producers need to know this will be required of all companies (those based in the United States, at least) in their annuals—and most probably will need help in (1) deciding what the truth concerning the Y2K problem is and (2) translating that into something the public can understand. I'd think most companies will want to address the problem potential in their letters to shareholders—at a minimum, in the MD&A. And while you're at it, check your own computers to see if they're Y2K ready. I learned, through a Parsons Technology software program, that my computers aren't. That's being worked on right now. Don't wait until the last quarter of the year to address it, that's my advice!

Among last year's AR Answer Man questions (No. 48, to be precise), you raved about the 1997 Aetna report, but noted it was an also-ran. I'm confused. Please explain. If was so great, why wasn't it named to the list of 10 best worldwide?

What are examples—good and otherwise—of recent annuals produced by companies having a tough year or facing a turnaround situation? In what ways do these reports need to be different than others?

What do you think of using "Value" or the like as an annual report theme? Can’t a company do a lot better than that?

S.C.: "Value" or some variation thereof—"Building Shareholder Value" and the like—is a copout, pure and simple. It's what an oppressed annual report producer, under great pressure from the folks in accounting, throws out, knowing it'll be gobbled up like a banana split on a hot summer's day. Anyone can produce a report with a hackneyed theme like that; it takes real talent to come up with something creative, yet applicable to the corporation whose name's on the cover.

Do annual reports ever contain really good photography? Or is most of the stuff that's published old hat?

Please comment on the use of false third-dimensionality in charts and graphs to display two-dimensional data.

S.C.: Sorry. You're over my head. The only thing I can respond to is your word "false." Obviously, if it's "false third-dimensionality" then I'm against it.

Please rush me copies of all the annual reports you have. My class assignment is overdue and I'll get a flunking grade if you don't help me.

S.C.: Sorry, but you flunked: I have no extras. At best, I have only one report for my review or analysis. None to share with students on deadline. (Is it ever thus?)

For a graduate class I am trying to get 1998 financial reports for Hershey Foods. Can you help??

S.C.: Sure: Either call your stockbroker, visit the public library or phone the company, which is based in Hershey, Pennsylvania, as you might imagine. I don't keep copies of annuals (apparently all you students think I do), other than those I use for evaluation/critique/commentary/etc. Bottom line: I can't get you a passing grade in your course, graduate or otherwise.

I've been proofreading annuals for several years. Today a client asked if there is a minimum legal type size for financial statements. I'd never been informed of such a thing. Would you happen to know?

Many companies now have Internet voting for their proxies. If a stockholder informs the company that he/she can read the annual report and proxy statement online, can the company discontinue mailing paper copies of these documents and notify the stockholder by email that they are available for viewing on the company's website?

S.C.:My friends at one telecommunications company say they think that, "if the shareholder asks for electronic only, we can meet our disclosure obligation in that fashion...so it's okay not to send the print." I'm not sure (1) everyone would agree or (2) that the Securities and Exchange Commission has ruled on it.

Several questions for you: First, what’s the approximate quantity of annuals printed in the USA annually? Second, what’s the approximate amount of money spent each year? Third, what percentage of the annuals in my first question are published online or as CD-ROM, etc.?

S.C.: My exclusive Producer Poll, soon to enter its 14th year, shows companies print an average of 302,367 reports—at an average per-copy investment of $3.15. Multiply that times 12,114, the number of companies the Securities and Exchange Commission says exist in the U.S. alone—and there’s your figure. To save me doing the multiplying every year, I simply refer to this as an $8.5 billion industry. I have no idea what percentage of annuals are done in a non-print format, but if you’re talking multi-media, the number is insignificant. Few companies are doing annuals on CD-ROM, though most put their annuals online—that is, on their Internet website. What’s it cost? Who knows? Certainly not I. Never did anyone turn his or her annual report into a CD-ROM, interactive version, even though some claimed to do so. Most are like National Semiconductor. Its CD-ROM, "Making it interactive," is tucked into a flap in the rear of its 1998 book. It takes "a multimedia look at" the company, and it’s rather well done, using the latest technology—Apple Computer’s QuickTime. But other than a message from its CEO, which does not—repeat, not—replicate what’s in the annual report, I found nothing else on the disk that’s from the annual. One last thing: Since you’re a printing salesman, why don’t you contact your printing industry’s trade association? Surely it has some of the data you seek. Good luck.

Do most companies use themes in their annual reports? What's the trend? And do you approve?

S.C.: Just over seven of 10 annuals have a theme, most often declared on the cover. But fewer than three of four are tautly, forcefully supported. Among early 1998s, a lesser three of five have included a theme, but a greater four of five are strongly supported. I'm all for inclusion of a theme, necessary I say to (1) give the reader a handle on what the company is trying to communicate and (2) keep the project on target throughout the six-month (average) production process.

In the text of an annual report or in the letter to shareholders, should you capitalize the word "company" when used by itself? Example: Our 1997 results demonstrate the Company's continued ability to deliver superior financial performance.

S.C.: No! In pre-sexist days, we called Silly Capitalization of words, willy-nilly, "schoolgirl writing." Today, it's simply an indulgence by corporate executives (mostly male) who think "our Company is special!" Lower case the "c" in company, please. Not only in the front of the book, but back among the financials (MD&A, etc.) as well.

Can you refer me to an annual report which would show me a good footnote disclosure of the "built in capital gains tax" for a company that just elected subchapter S?

S.C.:You've stumped me, at least temporarily. I don't know of any corporation, ever, that elected Subchapter S status. If any visitors to this area know, I'm sure they'll share their opinions.

I am an in-house graphic designer for a software company. My company has tapped me as the sole producer of the annual report, though I've never produced one. I think they expect the world of me and I don't want to disappoint them. I have come up with a theme and some creative ideas. Again, I'm one guy who's probably going to have some problems when the shakedown happens. Any suggestions or advice to a young, inexperienced designer?

S.C.:Sounds to me the company is setting you up to fail. Putting it another way, yours is a can't-win situation. Best you can hope to do is enlist the support of various executives in writing at least their sections of text. And make them all partners in the project. Also, it wouldn't hurt to pray a lot. You should, at a minimum, be reading my newsletter, online if not the print version. Visit my website often (it's free). If there's time, come to my 12th annual conference Sept. 15-17 in New Orleans. The company certainly should pick up the tab.

When you advocate 11-year financial data, what precisely do you mean? And why?

S.C.:Analysts require 11-year data to calculate a company's 10-year compound growth rate. I can't believe the number of companies (one in eight last year, one in seven this) that don't appear to know 10 years is insufficient—one short. The SEC requires only a minimal five years. I want companies to do more than the bare minimum. Credit for 11-year data is given if a 10-year CGR is declared, since that's my basic goal. Pepco, the D.C.-based public utility, received credit for 11-year data by listing data for 1998 and the preceding five years—as well as for 1988. Keep this in mind if your space is limited but you still want to be credited for using 11-year data.

We’re getting requests from numerous international locations wanting to create regional versions of our annual report. These range from translating all or part of our existing report to creating their own content and art while using our cover and/or look-and-feel of the corporate document. I’m drafting guidelines in response to these requests. Clearly, any material in the corporate report that involved approval from clients is hands off—they signed off for use only in the corporate document. (Most were adamant about this.) Also, unless these international locations are required by law to report additional financial data, I don’t believe we can sanction the publication of supplementary regional financial results. Still, there are a lot of grey areas to deal with. Have you grappled with this issue of "son-of- annual reports" before?

S.C.: Clearly, material approved by clients for one-time use—its reproduction elsewhere couldn’t be sanctioned. Also, I’m skittish about picking and choosing, depending on the venue, what material to present, especially financials—even to employees. Suppose a subsidiary or operation abroad wants to do an annual aimed at employees: It feels it has a right to decide what is presented. But what if an employee, also a stockholder (as so many are today), buys stock, or exercises an option, based on incomplete data? Then he or she has a lawsuit potential—and you’ve got problems. The more I think about the ramifications, the more I’d say the operations in the field should expend their talents, and their energy, on things other than the annual report. It’s too, too dangerous to attempt a condensed version of that primary document. Fraught, this scenario is, with problems.

Are acknowledgements ever made in an annual report? If so, what are the guidelines for crediting people? If you had to put credits in, who would you acknowledge?

S.C.: Increasingly I see credit paid—from Ameritech's "principal photography" to, occasionally, the entire AR team. Southern Co. credited one Michael Klodnicki with "writing and project management," L.M. Thomas III for "financial review." When I was a corporate officer, my position was that suppliers were paid fully, therefore shouldn't expect credit. I've modified that position over the years, though. In my monthly newsletter, I often praise graphic design (Critt Graham + Associates, for instance, on Southern's book), noting, often, that the company failed to credit those responsible. (Understandably, when the appearance is awful, no one wants to be cited.) Others tell me it's helpful, when seeking new talent, to see who's credited. Some—Quaker Oats, for instance—go so far as to credit the printer. In Quaker's case: "Lithography/George Rice & Sons." Southern simply cited Rice for "printing." Have I confused you sufficiently?

Most of your published information I've been able to access has dealt with Fortune 500 companies and large press runs. Do you have any current figures on costs per copy for press runs of 10,000 and under, in four colors?

S.C.: You've incorrectly assumed that the companies whose costs we've reported for the last 13 years are large. How's about a 25,000 press run at an average per-copy cost of $2.53? 30,000 at $1.48 a copy. 10,000 at $17.80 (a company based in Mexico). 7,500 at $5 a copy. 10,000 at $5.20. You didn't ask what that includes. No internal staff time. And traditionally the corporate secretary's function covers postage in its budget, at least for stockholders. (The professional communicators would eat the costs of mailing the annual report to the news media, possibly to Wall Street.) Those figures probably don't include internal photographers' time, either. But external costs—graphic design, typesetting, outside photographers, printing—that's all included. This will be my 14th year of conducting our exclusive Producer Poll, in case you wondered.

What is your opinion on splitting the book? I know of a very high-profile company that is considering not coming out with the front communications section till six weeks after the financials are released. What are the pitfalls of this approach?

S.C.: It's the first I've heard of this—unless when you refer to the "financials" being released you mean the legalistic Form 10-K, a required filing (of all companies) by the Securities and Exchange Commission. What you've described, though, is precisely why I oppose (1) the summary annual report and/or (2) a multi-part report. In either or both of those instances, I see it as a prelude to separation of the financials from "the communications part" of the book. I abhor that happening, because it does nothing but water down the work of a company's professional communicators. We encourage them to make the book one entity, rather than two separate parts. One readable document—as Ameritech, Bruncor and Southern Co. (and, to a lesser degree, Manitowoc) have achieved with their 1998 annuals.

I'm consulting for a multinational group of science and engeering companies. It has more than 1,900 employees in 80 offices throughout Asia, Australia, Canada, Europe, South America and the United States. More than 40% (primarily senior associates) are shareholders of the company. The annual report only goes to shareholders, but I think it's a valuable communications tool and all employees should receive it, so that they can better understand the company's mission and objectives and see tangible proof of how the company is performing relative to those objectives. I also believe that this information will foster an esprit de corps and become a vital link in our global communications efforts. The principals want me to provide statements from annual report gurus on why this is a good idea. What do you think?

S.C.: First off, I know of no other annual report gurus, conceited as that sounds. There's no one who spends full time monitoring the industry and its trends, and has done so for the last 17 years, using proprietary computer programs—programs I conceived and invented and directed creation of. Second, as I emailed you immediately upon receipt of your query, I'm all for all employees—and increasing numbers these days of course are stockholders—receiving the annual report. I have a problem, though, with a truncated version—one that perhaps "talks down" to the "little people." One that talks in simple, "dollars and sense" terms. That troubles me terribly. But I do believe any company is well-advised to provide all employees with the full-bodied, very same document as went to its non-employee stockholders.

With regard to question-and-answer formats, should the president/CEO be interviewed orally or should the responses be written (as if a test)? Should the president/CEO be given the questions in advance of an interview (if that is the preferred method)? Are outsiders better for developing questions/conducting interviews? How much editing is allowed after responses have been given? I’m treasurer of my company.

S.C.: What a marvelous question. I wish an easy answer existed. Let me comment on each question you posed and then tell you the procedure I would advocate, based on first-hand experience as well as 17 years of monitoring the world’s annual reports: First off, how the "interview" is conducted depends essentially on your CEO and his or her personality. For instance, you might take a tape recorder into a meeting and pose various questions for the boss. I think I’d prefer, though, that he (or she) get some suggested questions in advance—so there’s time to ponder really precise responses. Also, that would make the boss feel comfortable, knowing the direction the interviewer planned on taking. (Imagine if he or she took umbrage at your audacity. Said, "Over my dead body am I going to tolerate this kind of disrespect!") While I always thought no one had a better "read" on the boss, in one instance I recall, a journalist friend learned things that flabbergasted me. That the boss was a would-be gourmet cook on weekends, for instance, that one top executive on the staff fancied himself one of the world’s great cricket players. I was open-mouthed (I’d say speechless, but few would believe I ever achieved that state). How much editing is involved of an interview is an open option. Meaning: You legitimately edit to your heart’s content. Example: For one of the first issues of the print version of my newsletter, I interviewed a man I viewed as being one of the design industry’s "wise men." When we lunched, over a tape recorder, I thought he was—well, if not a candidate for psychiatric care, at least one of the most confusing (and confused) men I had ever met. But when I transcribed that taped interview, moved material around, picked and chose what to include, what to leave out, I was open-mouthed. He was brilliant, simply had difficulty communicating with us "common folk." Hope this helps, Mr. Treasurer. Summing up: (1) Give the CEO in advance a list of questions you envision posing – and then ask him or her how that person would prefer you proceed: your taking notes, your recording the conversation in addition, etc., etc.; (2) Take the interview and make it read smoothly, proceed logically from point to point, and don’t repeat things, even if the boss does. Tips: Don’t inject you, the interviewer, into the interview. One company’s interviewer, trying to make himself appear more important than he actually is, had boldface references to the CEO as well as to himself, so everyone would say, "Wow, young Jack’s engaging in a give-and-take with the boss." And don’t waste time identifying (1) the interviewee and (2) the interviewer throughout; once is quite sufficient, thank you. Run questions in boldface, perhaps, without interviewer attribution, the response in regular face. Again, without referring to the boss man or woman each time. Boring—and dumb. See: I told you there was no easy answer.

Since we're long-time friends, Sid, would you mind telling me what you think of the Intimate Brands report? I'm doing some PR for the design firm on that job and I'd like to be able to share your reaction with my client. What do you think, Sid? You're the guru of annual reports, and we're friends, after all.

S.C.: The AR Answer Man feature is specifically aimed at heading off such "privileged" conversations. Anyone (more often than not, NOT a subscriber) can post a question for all visitors to this website to see. Besides, I don't provide priviledged information to suppliers—only to the corporations themselves, and not via an intermediary, that's for sure. I take umbrage at the abundance of consultants (PR people and lawyers, among others) who think they're entitled to pick my brain for proprietary information, which they'll turn around and charge their clients for. That frosts me. I ask them, "What do you think I am—a government, not-for-profit agency, just waiting to answer your questions, gratis?" This isn't the reference desk at a public library, folks. "You pays as you goes" is my motto. And upfront, not after the fact.

How do you pick the world's 10 best annual reports? Do your personal feelings play a role in the selection?

Have you ever analyzed annuals to see how many (and how) companies are reporting their Economic Value-Added performance? Or do you plan to? Problem is there’s no standard way of calculating EVA. And doesn’t it bring confusion to use an EVA performance when another company listing its EVA could be treating things like cash, goodwill, etc., differently?

S.C.: Only a handful of companies (one that comes immediately to mind is Wisconsin’s Manitowoc) are using EVA. Manitowoc shows the traditional sales, earnings from operations, net and net as a percent of sales. Then it presents its EVA (Economic Value-Added), which in the past it has devoted a page explaining. Indeed, on a lively, visually appealing upfront gatefold cover, it presents a truly unique version of the action-oriented contents listing we advocate. Referring the reader to Pg. 1 of its ’98 report, it says "Since 1995, we have added more than $65 million in value to the company, based on EVA principles." On its financial highlights listing, it shows EVA rose 41.6%, the traditional net earnings essentially the same. Leading off the shareholder letter are three bulleted items, last of which refers to its "record EVA." There’s even an interview with the CEO in which he addresses Economic Value-Added, "technically complex, but it’s based on a simple proposition: that the money it takes to run a business has a price…EVA tells you how much value you create after deducting the cost of your capital...We compensate (most employees) according to EVA principles, because it makes you think like an owner of the business." Getting back to your essential question: I thought EVA, a proprietary program, spelled out—that is, specifically, precisely—what’s to be included in calculating a firm’s EVA.

Sometime ago, I believe you named the dozen best firms specializing in designing annual reports. Where can I find the list, and do your choices still hold—in other words, who would you recommend today?

S.C.: Beauty is in the eye of the beholder, as the cliche' goes. While lots of fine design firms are out there (Chicago's Cagney + McDowell, for instance, does the Walgreen Co. report superbly each year), I guess I'd favor those who have the courage to send me their oeuvre—their entire body of work—en masse. Now that certainly separates the greats from the wannabees. I'd have to say the best on that basis are Minneapolis' Little & Co., Chicago's Meta-4, St. Louis' Falk Associates and Atlanta's Critt Graham + Associates.

I’m trying to find a service from which I can order annuals that meet a certain criteria, such as revenue or asset size. Can you point me in the right direction, or is this something I can do through your site?

Are you aware of any companies that use video in conjuction with their on-line annual report?

S.C.: No. Sorry.

Have you ever done a study comparing your rating of an annual report and the company's subsequent stock performance? My rationale: Obfuscatory reporting is more likely to indicate a company is hiding something. True?

S.C.: On the latter part, true indeed. I do assume (I'm seldom surprised) a company has something to hide when I see what I call the long, slow windup before the pitch, often followed by no pitch whatsoever. That in itself is reason not to becloud things—just address the realities, no small task for some CEOs. Soon after I began my monthly newsletter (the print version), back in September 1983, I tracked (via Dow Jones News Retrieval) companies whose annuals I had named to the list of world's best. I monitored their industry's price-earnings ratio, both short-term and longer-term, and compared that with each firm's P-E ratio, short- and long-term as well. A correlation appeared to exist between an outstanding annual report and a company's P-E ratio, especially long-term. Putting it another way, I wasn't surprised to find an industry-besting P-E ratio by a company whose report excelled. But it doesn't happen overnight. It takes a while for the message to filter down to the troops that there's new, savvy, honorable management at the helm. Does that mean, for example, I'd invest in companies like AFLAC, Bruncor, Southern Co., and especially Ford Motor Co.? You're darn right I would—except my policy is not to invest in any publicly held company. Then no one can say I'm praising the annual report in an attempt to kite the stock.

Have you ever done a correlation of production costs and being on your world’s best list? Just curious if the best producers all tend to come in below average, or what.

S.C.: I find that those finishing high up on the list of "world-class" reports (scoring 100 or more of a potential 135 points) tend to spend essentially the same as the average overall. The average, that is, of those reporting in my 14th annual Producer Poll. With results distortions omitted, the per-copy investment averages around $3.32 a copy. It’s essentially the same for top reports as for runners-up. That includes all external charges save postage and handling, traditionally charged to the corporate secretary’s function. It does not include staff salaries. It does include outside writers, photographers, printing and binding.

You say the Cato Positive Index was a record-low 0.8% among 1994 reports. I wonder if honesty among CEOs likewise was at a low ebb. It would make sense to me that the two—a poor CPI and a lack of forthrightness on the part of the boss—went hand in hand.

S.C.: Honesty is running about 88%, meaning 12 of every 100 CEOs has difficulty facing the music—that is, owning up to a poor performance. During the 1994 report year, honesty actually averaged a bit higher - 89%. I’m not sure what the significance of this is, but CEO honesty was at a record-low 85% the year prior to that woeful CPI—among 1993 reports.

When honesty is perceived (by you, Sid) among chief executives, in their letter to shareholders, is the boss more or less likely to allow his picture to appear in the annual report? It would make sense to me that when the boss isn’t seen by you as completely forthright, his visage would tend to be nowhere to be found.

S.C.: Only nine of 100 annual reports do not include the boss’ photograph. Meaning: 91% do. When honesty exists, the CEO’s photo is slightly more likely to appear—92.4% of the time among the current crop, 1998 reports. When he or she isn’t perceived as honest? The boss’ picture is used only 76% of the time—in but three of four reports. Meaning: One of four deep-sixes use of his or her photo when forthrightness isn’t forthcoming.

How often have you seen annual reports (good or bad) delivered via CD-ROM? And can you name some companies that utilized this technology?

S.C.: Sorry, but if you’re interested in the annual report on CD-ROM, I’m afraid you’re a bit behind the times. Have you heard of the Internet? Okay, so you’re serious. At my annual conference in 1994 at Portland, Ore., a luncheon speaker spoke about the annual report on CD-ROM. Within months, he had (1) doubled the price he quoted at lunch and (2) gone out of business; that is, closed shop. In the July 1997 issue of my newsletter (the print version, that is), I wrote that "the annual report on CD-ROM is passé." IBM was one of the very first to utilize this now-outmoded technology, but with decidedly mixed results: CEO Louis V. Gerstner’s head and torso were reversed on my computer screen at least—his torso at the top, his head at the bottom. Avery Dennison went that route, as did Schlumberger. In neither of those instances was it truly an annual report on CD-ROM. Schlumberger’s, though outstanding, was about the company and its engrossing activities worldwide. Summing up: a lot of energy wasted on discussing an outmoded technology. As the gossip columnists say, "forgeddaboutit!"

How many annual reports—above the number of registered shareholders—on average do companies produce?

S.C.: The ratio—number of copies printed to number of shareholders—has averaged 1.9 year after year, as indicated by my annual Producer Poll, now in its 14th year. As of now, the ratio is running a bit lower—1.7. Which may possibly mean companies are economizing a bit by printing somewhat fewer reports.

In Canada, the average per-copy investment in an annual report is $6.84. How does that compare with your figures?

S.C.: When results-distorting highs and lows are excluded—a low of 65 cents a copy, high of $11—the average per-copy investment worldwide is $3.32, which I suspect will decline as more responses are received to my Producer Poll.

Are annual reports produced and driven purely by compliance standards or are they strongly influenced by public relations simply to uplift companies’ profiles?

S.C.: Likely, a combination of both. While three or four dozen reports do quite well in my annual survey, I’d guess most companies do a report begrudgingly; that is, only because it’s required or customary. Key to a great report is a producer who’s a professional communicator, and has the strength of his or her convictions. Meaning: Someone who takes pride in doing a memorable job. My experience indicates that when a producer of top-flight annuals goes out the door, like as not the subsequent annual will tank (i.e., fail miserably).

I’d like to get your thoughts on the use of a "thematic" vs. "departmental" approach to the annual report editorial section.

S.C.: I advocate a thematic approach. Heaven help those who get euchred into breaking down the report by departments. I recall one vice president who complained that his textual section was "smaller than Lou’s!" When I revised it, he then complained: "Now look at it: It’s bigger than Lou’s!" As professional communicators, we know to produce a document that has external appeal—the good ones write as would a reporter for a business section of a newspaper, or for a business-oriented magazine. Producing an annual report with a departmental approach would be akin to a magazine’s content being arranged to coincide with its various executives and their respective domains. Ludicrous, obviously.

I am doing research on Internet shopping companies and trying to determine how many people (traffic) are going to websites vs. how many are buying and a breakdown of those numbers and how and what kind of traffic a new Internet shopping company would experience. Can you help? I was trying to find annuals on amazon.com and etoys, etc.

S.C.: Sorry, I haven't a clue. This is not a high-volume business, among other things. This website, for instance, has averaged just over 1,000 visitors each month for the last 40. That's not big time—not by comparison to the World Wrestling Federation, for instance, or the NFL, which allegedly get millions of hits (visitors) a day!

Our company is considering commissioning a survey of our stockholders to see how effective our annual report is in conveying certain messages about our company. How useful are surveys of this kind? And can you recommend a survey company?

S.C.: I've long been an advocate of such studies. My first was by Opinion Research Corp., an arm of Fortune Magazine, as I recall. Many companies—Phillips Petroleum and Pfizer are two that come to mind—have polled recipients of the annual report to learn their reactions. Norfolk Southern does it itself, apparently: It included a two-sided reader survey in the back of its 1998 report. Chicago-based Ameritech does the followup survey one better: For the last several years it has surveyed focus groups on their reaction to the document—before it goes to press, before it's finalized. That makes sense to me: If you have a choice, do a pre-publication survey to learn in advance what readers like and dislike, if they comprehend the message(s) you hope to communicate. I believe Ameritech uses Adams Research in Virginia. Subscriber Philip Steitz' Survey Research Corp., based in our nation's capital, has done work for such companies as Eastman Chemical, Conoco, Pfizer and Ford. He's at (202) 347-1974. In addition to his expertise, he's a marvelous man, and a frequent attendee at my annual International Annual Report Conference!

I note your dislike of the summary annual report, but does that extend to the practice here in the United Kingdom of producing an annual review (strategic, corporate and summary financials/legal) AND an annual report (statutory, full OFR, full legal and financials? In our view, this approach significantly improves the targeting capability of annual report literature, particularly the needs of small shareholders. Your view would be much appreciated.

S.C.: First off, I’m not acquainted with the initials "OFR." That aside, while I’m familiar with the U.K.’s fondness for the summary report, perhaps you’d benefit if I reminded you of the thought processes that have gone into our taking issue with the truncated version of the full-bodied, "let-it-all-hang-out" product. If companies produce a myriad of documents such as you enumerated, it’s far too easy for clerical personnel to pick and choose what to send out—to the ultimate detriment of the individual shareholder. (Those analysts who follow a company are privy to all sorts of data I consider "insider information." It’s only the little person who gets short shrift.) Take the very first summary report, by McKesson Corp., which has run into its own swarm of bees recently. While the report producer claimed he stapled into each book a copy of the financials, both I and a witness to the conversation piped up, "Not in my copy!" "So we missed two of 150,000 copies," responded McKesson’s man. That’s my point, you see: It’s too easy for staff (or a Machiavellian or "little Napoleon" executive) to decide, "Oh, this person surely doesn’t need the full-bodied (read: complete) annual report; a summary will suffice." Besides, as all reporters (and others, I’m sure) will attest, it’s presumptuous to assume we neatly file all the documents a company provides periodically. That’s simply unrealistic. What’s more, I see a divide-and-conquer tactic fermenting here: The CFO tells the boss, "I’ll handle the boring, back-of-the-book stuff, chief, and we’ll let those PR people do the pretty stuff up front; they’re only interested in expense-account lunches anyway." So the boss, like as not somewhat uncomfortable with his or her role as a public communicator, a public figure, readily agrees. That, my friend, will sound the death knell for the officer-level professional communicator. Cutting to the chase: Give me, any day, a complete annual report. I’m pleased that London’s Lloyds Bank, which admitted its summary report failed to provide adequate information for potential investors, returned to the full-scale product after continued criticism by yours truly. I suggest you do likewise for your clients.

I know how busy you are, but our accounting firm has put together a questionnaire and your responses would really be appreciated. For instance, what guidelines would you, personally, follow if you were preparing an annual report? Wait, I have more...

Have you collected any data—or formed any opinions—regarding dual authorship of the letter to shareholders? That is, where more than one individual signs the letter and appears in the photo? With mergers and acquisitions creating some new succession dynamics, have you noted a rise or fall in such letters?

S.C.: First off, the percentage of letters signed by more than one person has declined steadily—from 34% among 1996 annuals worldwide, off to 31% a year ago and off even further to 30% so far among '98s. I much prefer a letter signed by an individual—and indeed my copyrighted criteria reward CEOs who are pictured alone, rather than grouped with one or more persons. (My belief: a group photograph—that is, the CEO not pictured alone—is a case of, "If I go to the guillotine, I don't go alone.")