Sharp design and clear text in corporate reports highlight what is most important for shareholders - and for the public SCOOPING THE BEST Report Award in the 2005 Hong Kong Management Association Best Annual Reports Awards for the third year running, CLP Holdings produced what Howard Gorges, chairman of the nine-member panel of adjudicators, called 'an outstanding annual report'. 'CLP has again excelled. It has a great team and has put in a tremendous amount of work and co-ordination with senior members of the board to produce this award-winning report,' said Mr Gorges, who is also vice-chairman of South China Brokerage. In the General category, HSBC Holdings won the gold award, with The Hongkong and Shanghai Hotels and MTR Corporation taking silver, and the Airport Authority, Hong Kong Exchanges and Clearing and Hysan Development each winning a bronze award. The Securities and Futures Commission won gold under the Non-profit Making and Charitable Organisations category, with the Hong Kong Monetary Authority collecting silver, and the Hong Kong Jockey Club and Tung Wah Group of Hospitals both receiving bronze awards. Esprit and City University were the two citation award winners for achievement in design, and CLP, Hysan Development and the Securities and Futures Commission were each cited for achievement in corporate governance disclosure. Besides providing separate sections on social and environmental concerns and corporate governance in its latest report, CLP paid close attention to the quality of the report's design, presentation and clarity of language. The report also carried a message for not just the shareholders but also the Hong Kong community at large. 'The medal-winning companies don't just produce a terrific report one year. It's a process of evolution,' Mr Gorges said. 'There is a lot of co-ordination between what the board wants to achieve, the messages it is sending and the accounts themselves, along with the public relations and marketing side of putting all that into print. 'All reports must also comply with the Companies Ordinance and stock exchange and accounting rules and regulations. It is a demanding process and it has become more demanding,' he added. In recent years, companies were paying closer attention to corporate governance in their annual reports, a trend helped by the introduction in several jurisdictions of awards for best corporate governance practices. At one time, companies would give the bare minimum of information relating to regulations and statutory compliance in their annual reports. Now, they incorporated their best practices to meet greater compliance demands and explained the rationale behind their actions, Mr Gorges said. Companies were also including information about their positioning in regard to business ethics and organisation. The companies cited in the 2005 awards were all good examples of different and refreshing approaches to dealing with corporate governance, Mr Gorges said. The award winners and the companies cited had also made good use of design to convey their message clearly and make a strong impact on readers, he added. The use of space and colour to convey a corporate message and clear text explaining accounting policies and business risk analysis helped to highlight what was most important to the shareholders, Mr Gorges said. 'Reports must be user friendly, engage the shareholders and readers, and put over the information required - what drives each company's business and how they achieved their goals in the past year.' If there was a weakness in the corporate annual reports, it was in the timing of their release, Mr Gorges said. Companies are encouraged to be as prompt as possible in the publishing of their reports, preferably within two to three months of the financial year-end. Mr Gorges said companies should make their reports more future-oriented, indicating where they were going and how they intended to get there.