We use 15 criteria to assess annual reports, grouped into the four categories you see here.

As we’re a creative consultancy, we use our skills and knowledge to arrive at a unique, qualitative judgement. We acknowledge that this is a subjective view and that other views are available – but it’s guided by experience and focused by a deep-seated belief in the value of communication. HDISU isn’t a tick-box exercise in compliance. Instead, we’re able to judge the quality, depth, transparency and coherence of content, rather than simply identifying that the content in question is present. As with many other comms projects, what the audience takes away from the experience is not only shaped by what you say, but by the way that you say it.

The criteria themselves are designed to reflect current annual reporting legislation and best practice. We haven’t included a separate category to assess Integrated Reporting because many of the notions that are central to it, such as sustainability and resources and relationships, are picked up by other criteria.

Understanding the business and context

What we measure

Business overview
Business model
Marketplace
Resources and relationships

This category assesses whether the report gives the reader a good overview of what the business does and the context in which the business operates.

The reader should understand which activities/services the business provides, where it does so, how it actually creates value from its operations and what makes the business different from its competitors. The reader should also understand that the business doesn’t operate in a vacuum. It is affected by, and must respond to market factors, and it relies on certain resources and relationships to carry out its activities effectively.

Explaining and measuring performance

What we measure

Strategy
KPIs & performance measure
Financial performance
Communication of remuneration

This category assesses whether the report provides the reader with a clear understanding of the strategy the company is/has been pursuing, and how it is performing against it.

The reader should have a clear understanding of the company’s overall strategy and the objectives that are in place to achieve this. Objectives should ideally be linked to KPIs, showing how the company measures the success of its strategy, and remuneration showing how the executive team is rewarded. The report should communicate financial performance clearly.

How sustainable is the business?

What we measure

Risk
Sustainability & materiality
Governance
Forward-looking aspect

This category assesses whether the report gives the reader a clear idea of how the business is planning for the future and ensuring that the business is sustainable.

The report should describe the principle risks that might face the business and how it is mitigating against them. The reader should have a clear understanding of the governance structure that is in place and be assured that the board is working effectively to govern the business. The report should look to the future – what are the challenges and opportunities ahead, how will we face them etc. This should include a view of the company’s key sustainability objectives and what it is doing to make progress against them.

How well is the story explained?

What we measure

Messaging & appeal
Linkage and flow
Clarity & transparency of language

This category assesses whether the report as a whole tells a compelling story in a way that is engaging for the reader, is easy to navigate, links coherently throughout the narrative and contains a balance of positive and negative events.

The report should communicate some key messages, preferably through a mix of narrative styles (e.g. use of case studies). Overall, the report should contain information that is key to the company’s shareholders, and has clearly been updated year on year rather than remaining static. These overarching messages should not exist in isolation, but flow throughout the narrative. Relevant sections should link together to provide one coherent story. If there have been negative developments during the year, these should not be glossed over. Creative is used well to highlight key information and make the report a clear and engaging read.