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What makes your company different? Telling your value creation story through reporting

By Sallie Pilot, Director, Black Sun plc

The question as to what makes you and your company different is either the easiest question in the world to answer, or it is the most difficult question to answer. In my view this question is too important to go without a well-thought out and well-articulated answer in your annual report.

If you can answer this question, later answering the question “why should I invest in you or support you?" in response to your investors and stakeholders, will be simple and clear.

Midway through our detailed review of the FTSE100 and leading international companies’ annual reports in the pursuit of 'What good looks like' - this is one of the key themes emerging. In my view the most compelling reports are the ones that can explain simply and clearly what differentiates them from their competitors.

How and where a company answers this question can be tackled in many different ways effectively. What I believe lies at the heart of any good communication is the focus on value creation and focus on factors beyond just the financial that create longer term-term sustainable value.

For example in Coca Cola Hellenic’s latest annual report an early page is dedicated to presenting their investment case. This gives the reader an insight into things such as their unique relationship with the Coca Cola Company, their leading brands and diverse portfolio of beverages and their lean manufacturing footprint. This is then further strengthened a few pages later by their business model, which defines the activities they engage in, the relationships they depend on and the outputs and outcomes they aim to achieve in order to create value for all of their stakeholders in the short, medium and long term. Together these pages give you an excellent understanding of the value creation story of the business and what makes it different. 

Singapore’s leading consumer bank, DBS’s latest annual report, clearly articulates their business model and how they create value. A double page spread gives an insightful overview of their strategy, their business, how they differentiate themselves – through the commitment to ‘Banking the Asian Way’, technology and infrastructure, nimbleness and agility – each of which are described, and then how they governed and how they measure their performance. This is a clear, succinct and powerful overview, which sets them apart.  

So the ultimate test for a good report – have you answered the question as to what makes you different?

- Is it something your competitors might also say—or do also say?
- How does what makes you different — make a difference for your customers, employees, investors, society and other stakeholders?
- Does your company have an underlying belief structure or values that differentiate and define you? How do those differences translate to something meaningful for your stakeholders?
- If you claim you do something different and perform better than your competitors, how can you prove it? What allows you to perform better and why can’t your competitors copy you?
- Are you clear on impacts and the value that you create? For yourself? For others?

I hope so. Make my job more interesting by telling me a good connected story about your business and what makes it different!

Following the launch of the IR Society's 2016 Best Practice Awards, the Best Practice committee, along with my team at Black Sun have produced the Best Practice Awards Review.  This review hightlights last year's winners, the judging process and our best practice guidelines. I strongly encourage companies to enter the IR Society Best Practice Awards, to seek recognition for their performance and help set the best practice standard in the UK and abroad. Good luck! Entries now open until 30th June.

Published: 25 April, 2016