What Sid Cato's Newsletter on Annual Reports isn't. Mine is nothing if not esoteric, the subject matter some would consider technical, the focus terribly precise. Our purview, every month since September 1983, is the annual report to shareholders, published each year by corporations worldwide. It doesn't deal with the pros and cons of same-sex marriage. We have no interest, professionally, in budget surpluses, or absence thereof. Neither is our purview weapons of mass destruction. Or, for that matter, the policies debated in our nation's capital—except as they affect the key corporate communiqué (which increasingly few view the document that way; that is, as key). We spend full time professionally keeping tabs on what long was acknowledged as "the key corporate communique," though it's becoming less and less well thought of, both inside corporate headquarters and abroad in the land. Frankly, precious few give the document its due, treat it with the respect corporate staffs (and yours truly) see it warranting. First annual report was introduced in 1823 by an East Coast public utility. Since then, the number we've received has declined, year after year. Back among 1990 reports, for instance, 582 were received and evaluated fully and impartially. That was off among 2002 reports—last year's crop—to 166, little over a quarter of the earlier number. How good is the lesser number? One standard is the average Cato Positive Index, reflecting the presence or absence of three dozen indicators of a report's positive or negative nature—from use of the CEO's photograph, leading off the letter for maximum recall...to the average positive nature, then and now...to the percentage of boards of directors that exclude women or minorities. The CPI was introduced with the 1986 crop of reports, when it averaged 4.1%. A high-water mark of 14% among 1997s, half that among 2001s, if up a bit a year ago to 9.9%. That's something. First year we began monitoring use of the boss' picture was among 1984 annuals, when the figure stood at 83%. A high of 89% was reached among 1999 reports, 86.7% currently. How's about director photos? This element was monitored from the start—among 1982 reports, when 23% pictured the board. Today? Twice that—45.8% among 2002 reports (if off to 28.6% among early-arriving 2003s). How many boards, though, are seen to continue to exclude women or minorities? That was an element whose tracking was begun with 1992 reports. Of the annuals that year to picture directors, 41%—two in five—were seen to be exclusionary. That declined to a low of 17%, one in five or six, among '97 reports, 15.8% last year—one in six. So far among early 2003s? As noted, 28.6% of the reports pictured directors; none was guilty of going the male-only route. For which one should be grateful, I guess.

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