The shareholders’ reports sent out after shareholders’ meetings have often been overly formulaic, and accordingly the information contained within them has not been all that useful to shareholders. Recently though, the importance of private investors, and the dependence of customers upon them, has been increasing. Amidst this change, such formulaic reports could be misinterpreted as representing a lack of consideration for the needs of shareholders on the company’s part.
In response to this change, a number of companies have been reevaluating the purpose of publishing these types of reports, as well as reevaluating the position of these reports within the company’s overall IR activities. This has resulted in the recent trend of revising the traditional style of such reports, leading to drastic revisions to the content contained within the report, along with the frequency and timing of its publication. The end result is a new type of report: the shareholder newsletter.
Shareholder newsletters and reports should not be limited to such items as a review of operations and an overview of the financial statements. Instead, they should include information on such areas as a company’s management policies, growth strategies, business operations, and products. This information should also be presented in a manner that is easy to understand. If this is achieved, we believe that shareholder newsletters and reports can be transformed into functional IR communication tools used to ensure long-term investment from private investors and develop the company’s fan base.