Reporting Websites

TODAY, COMPANIES USE THEIR websites for a multitude of purposes: to market their products, advertise, engage with customers and employees, post important information on a real-time basis, enhance their image, and reinforce their brand—not to mention to sell products themselves. In comparison, how a company uses its website for corporate reporting purposes is fairly narrow. Because it is an increasingly significant channel through which the company can communicate with shareholders and other stakeholders, however, it is an important one. By capitalizing on their reporting websites, companies can move beyond the paper constraints of an integrated report in order to create a platform for the company's integrated reporting—a more multidimensional, interactive, and engaging form of communication. In the previous chapter, we saw that most companies producing integrated reports were doing little to support these documents online in a way that would make the information they contain more useful and usable. While the Internet has the potential to dramatically enhance integrated reporting and integrated thinking, it can also do so for more traditional corporate reporting. To the extent this is happening, it is reasonable to expect that large companies have the resources to do so.

To assess how the world's most sophisticated companies are leveraging the Internet for corporate reporting purposes, we studied the websites of the largest 500 companies in the world: the "Global 500."x The list came from Fortune for fiscal years that ended on or before March 31, 2013. While size is not equal to sophistication, we reason that it is a good proxy. Furthermore, a few statistics indicating the economic significance of these companies give them, in our view, a responsibility to be effective in communicating their performance to shareholders and other stakeholders through both reports and websites. Their revenues ranged from $467.2 billion for the number-one-ranked Royal Dutch Shell to $24.1 billion for Ricoh at number 500. Market capitalization ranged from number 11-ranked (in revenues) Chevron's $ 504.8 billion to 309-ranked (in revenues) Alliance Boots at $17.0 million.2 In 2012, their revenues totaled $24.3 trillion, and they had profits of $1.9 trillion. Their market cap of $21.9 trillion represented 42% of the global market cap of the world's approximately 46,000 listed companies. This tremendous economic power is concentrated in a very small number of companies, and even within this elite group, there is also a high degree of concentration. The top 100 represent 48%, 43%, and 32% of the revenues, profits, and market cap, respectively, of these 500 companies.3

Based upon detailed studies of over 100 companies' websites,4 including some of the best examples of how integrated reporting companies are using their websites, we developed an inventory of items to cover general website characteristics (e.g., did the company have a separate website focused on the corporation itself or was it part of its e-commerce websites, as under an "About Us" tab), how the website was being used for financial reporting (e.g., how many years of annual reports were available online and whether reports provided in different languages), and how the website was being used for sustainability reporting (e.g., does the company provide information about sustainability on their website such as a report and how difficult it was to find it). Only 24 of these companies were practicing integrated reporting.