1.		This is your 21st year, now, of monitoring the world's annual reports. How many companies honor your request for copies?
			Answer: More than 2,300 company names are on my mailing list. Only a fraction respond. Each year I make mailings to those that ignore my requests in an effort to see reports from around the world, from corporations large and small.
	2.		Is that a sufficient sampling to enable you to get a fix on the industry as a whole?
			Answer: If, as the SEC says, 12,114 companies are required to produce an annual report, then I only need to analyze 110—square root of the universe—for a representative sampling. Each year I analyze several times as many as Gallup would require to predict outcome of a Presidential election, for instance.
	3.		For more than a decade, you selected the world's 10 best reports for Chief Executive magazine. Could you win one of your awards?
			Answer: Without question, superhuman effort is required for a report to finish among the best. Plus the cooperation of management—that's vital. Almost assuredly, producing a winner has to involve tantrum-throwing at least once during the six-month (average) process. More than in recent memory, producers of annuals are complaining of the potential hazard to their health. Consistently, three of four producers say they feel stressed out or experience other negative effects from their compression-chamber challenge.
	4.		You advocate this being an evolutionary process, not revolutionary. Meaning?
			Answer: I maintain a report should evolve year to year, not break new ground each time out. Only exception is when a report is abysmal and needs a dramatic overhaul. Otherwise, a company should build on last year's successes—learn, for instance, what recipients of the document liked and disliked, mistakes to be avoided. The learning curve alone also ought to ensure that producers hold the line against inflationary costs in turning out this key corporate communiqué.
	5.		How about you? Why does Sid Cato do this?
			Answer: I've had a love affair with annual reports since getting close to my first one more than a quarter-century ago. I see an annual report as a corporate Rorschach test. To me, it's like reading a mystery story is to others. To see how a company portrays itself, how it handles the inevitable crises, how forthright it is in the face of adversity. To see how a clearly talented CEO nurtures the corporate culture to achieve success beyond its apparent capabilities—that's what turns me on.
	6.		Why must the CEO's photograph lead off the letter to shareholders? In fact, why does it have to be used at all?
			Answer: Back in the late '50s, GE did a study that showed that a better recall of the letter resulted from use of the "writer's" photo. Best recall of all: when the letter led off with his picture. GE made no analysis of its findings, but I'm convinced that (1) you don't penetrate the reader's sense of consciousness without a photo of the letter's author and, (2) as GE discovered 50 years ago, leading off with the boss' picture gets the most favorable recall of all. I believe that's because the author's visage is in the reader's mind. That's precisely why Sid Cato uses a photo of himself leading off his newsletter each month.
	7.		What about board involvement in the annual report?
			Answer: While I advocate that the board of directors hold the CEO's feet to the fire (i.e., tell him [or her] in no uncertain terms that this is THE key corporate communiqué and he darn well better involve himself in its preparation and approach and what have you), I conversely want no board involvement in the actual document itself. No signoff on drafted copy. Certainly no board approval of what's ready for printing. At most, a director can approve of his or her photo prior to publication. Even then, I'd discourage board involvement. I do recall, though, one chairman who said directors wanted their photos and biographies in the report. I said there wasn't room for both director and officer material, and that I advocated the latter as the more important. "That's fine," he smiled. "But the directors don't agree with you." We ran director stuff, omitted material on officers, needless to say.