Summer is the end-of-year accounts time for some companies. In the next few months in particular, trade and niche media will publish stories based on financial statements. A lack of time combined with the pressure to get clicks means that end-of-year reports are a quick and easy source for articles. In the vast majority of cases (i.e., all your competitors) the media potential of the accounts is reduced to the company comment of "satisfactory" or "unsatisfactory".
Most companies fall into the temptation of only listing the information in the management review required by law - especially if they have had a slightly unsatisfactory financial year. But why not use the opportunity to tell journalists about your company? Tell them about the exciting initiatives launched over the past year or comment on specific events that have affected your business?
Turnover, margins and operating results paint a picture of the company to the outside world, but the management review is your opportunity to put numbers into words and context - and journalists will love this. So by going from lists to the literary, you can actually turn your management review into a veritable magic PR wand that will make your business stand out in the crowd.
Don’t forget the formalities …
There are, of course, differences in the requirements for a management review. Especially small companies and self-employed people are exempt from a number of requirements. Here, we are basing our advice on Accounting Class B and above, which means everything from SMEs to C25 companies, with C25 companies being subject to additional disclosure requirements. What follows, however, applies to everyone.
It is important that the review reflects reality and does not paint a falsely optimistic picture - so even if we advocate using the management review as a public relations tool, we must still be realistic in the way we present the company, and provide credible evidence for comments regarding issues such as market development.
In black and white, the Financial Statements Act needs to provide information on:
- The company’s main commercial activities
- Any significant changes to company activities and financial position
- The company’s own shares
Many companies also choose to mention events after the end of the accounting period or include a section on expectations for the coming financial year.
1. Tell them what you do
Journalists are of course not lazy by nature, but you can give them a helping hand. Describe the company's primary focus and main activities, and detail the important focus areas that define your business. These things are usually readily available on your website, so why not serve the basic details on a plate so that even the holiday temp on the editorial team can make good use of them?
Think of three things you would highlight about the business in general and the past year if somebody were to ask. Think of it as a media-focused "elevator speech" - but remember the Financial Statements Act: You cannot only highlight the good things, but should also include the not so good elements.
Let’s say your company produces metal springs. Here, you could mention that the products are used for vital medical equipment, but if 65% of the production goes to the weapons industry's production of machine guns, it would be decidedly misleading to only emphasise the positive angle. Of course, exaggeration can promote understanding, and you only need to include things that are of major importance to the business as well as significant changes or events.
In addition, why not include a few lines to describe market trends that are currently important to the company or will be over the coming years. This can be used by the journalist to put the story into perspective while giving the impression of a business with its finger on the pulse.
2. The year came and went – but what set the agenda?
Now it is time to tell people about any significant changes in your activities and financial position over the past year. Again, the rule is that you cannot only focus on the positive events, but need to give an accurate and fair view of how the year has progressed. And while it may seem self-destructive to mention any downturns, it is necessary if you want to boast about the positive things.
Strangely enough, goodwill can even be gained by showing transparency and accountability – if you as a company do not beat about the bush with the less-than-positive stories, but actually give a straightforward and honest account of what went wrong, why it went wrong, and the steps that have been taken to prevent similar situations in the future.
An open approach gives you the opportunity to explain why you experienced a possible decline in turnover, bottom line or orders. But it also serves to make the positive elements of the review more credible when your company dares to present successes and failures equally. Again, only incidents that have had a noticeable negative effect on the company need to be included.
3. Events after the end of the accounting period?
Many companies always include a section on “events that occurred after the end of the accounting period” - Most often than not, there have been no such events. In principle, it is not mandatory to include events that fall outside the accounting period, but again it not only sends a signal of openness to both stakeholders and the media, it also contributes to the impression of credibility.
4. Lively prose or clinical analysis?
When it comes to the actual design and formulation of the management review, basically anything goes. This does not mean that you should take the opportunity to release your inner novelist, but there is plenty of room for creative thinking. A good rule of thumb is to weigh up the "quote friendliness" of your review.
In Publico's most recent financial statement, which covers the financial year from July 1, 2017 to June 30, 2018, we wrote the following about developments in the market and business:
“There is still headwind in the market for communications agencies in general - and for Publico in particular. On the one hand, many companies are increasing their marketing and communication budgets, and on the other hand, the PR bureau category is growing at the expense of other agency types. Publico has also built up a broad portfolio of public and private clients, with no customer taking up more than 8% of our overall business. Many customers are expanding their cooperation with us, and we are receiving unsolicited inquiries from more and more companies. Publico has loyal customers and has become an increasingly well-known brand in the market.”
The text marked in bold and italics could easily serve as a direct quote from the financial statement and explains how we have focused on creating a broad customer portfolio. This not only means that the business would be less exposed if a single larger customer chose to leave us, but also that we have managed to expand our relationship with existing customers. In the previous text, we also describe positive market trends and their importance for the business - journalists can easily use this to fill out the body of an article.
So there is no need to turn to colourful literary prose. Instead, focus on communicating the right information in an understandable way and direct attention towards your company; its capabilities and its challenges. If you do this, you will already be a step ahead of some of your biggest competitors – and have done your bit to transform the day-to-day story about your company into something more meaningful.
5. When you do something good, tell people about it!
In recent years, a wave of accountability has swept over Danish business - and especially in 2019 this has gained momentum. While larger companies (accounting class C and above) have to comply with specific legal requirements to account for their CSR work (§99a), it is not uncommon for other kinds of companies to have a number of policies or initiatives in place that relate to different principles and guidelines for accountability and sustainability.
CSR, ESG or even the UN's 17 Global Goals are all here to stay and will only become more relevant in the years to come - and maybe your company has already laid down guidelines or policies in this area or perhaps introduced a number of initiatives.
Either way, there may be positive stories about your business that shouldn't be overlooked. You might be actively working to ensure diversity in the workforce, reducing your CO2 footprint by replacing your sales staff’s diesel cars with electric or hybrid cars, or starting some other initiatives. This makes you part of an increasing trend in society. This does not only have to involve significant initiatives. Activities such as employee satisfaction surveys (not the statutory APV) also count, and can help paint a picture of a responsible company.
Depending on the media, there is no guarantee that your excellent initiatives will fill up column space, but as with everything else, it will help to put your business in a good light. And who knows - maybe you might be top of the list to contribute when a journalist needs to write a trend article on sustainable initiatives in the business world?