The quality of online reports.

Best practices and usefulness assessment.

How can we define quality when it comes to online annual reports? Are there any empirical methods we can use to evaluate the quality of an online report? Emily Heineking, alumna of the HHL Leipzig Graduate School of Management, approached such questions in her recent master thesis and shares her most important insights with us.


In your master thesis, you evaluated the current online annual reports published by German DAX and MDAX listed companies regarding the criteria which are presented in the available scientific literature. Which criteria are used to evaluate the quality of digital annual reports?

The main distinction made in scientific literature is between criteria regarding the contents and the presentation of online financial information. While contents criteria can be used to evaluate the completeness of the annual report’s components, the presentation criteria include a range of features and functionalities applied to enhance the usefulness of the annual report when published online. These range from criteria increasing the understandability of data, such as the availability of a chart generator, improving web usability through navigation aids like dynamic related links to criteria making use of different possibilities of customization.

What are the benefits of HTML reports compared to PDF?

HTML reports are more flexible and dynamic, and offer more possibilities regarding navigation and customization compared to PDF reports. Chart generators and other useful tools can only be implemented in HTML format, and the report’s search engine results are more adequate than those published as PDF. Regarding the increased demand for mobile device readability, HTML offers better options than the static PDF format. In addition, users’ preferences within the report can be analyzed to identify key areas of interest in the report, allowing further improvements to the report over time.

On the other hand – where do you see benefits of PDF reports compared to HTML?

Surveys revealed that institutional investors tend to prefer the more static PDF format which is also easier to print as well as to design and set up. In addition, the distinction between audited annual report contents and other IR information is clearer than for HTML reports. Thus, PDF as a channel should not be completely neglected but  employed alongside HTML to benefit from an increased usefulness of the annual report to all user groups.

HTML reports range from shortened “super summary” versions to full HTML reports. From the perspective of your research: which way is more user-friendly?

Although user requirements differ between user groups, my research showed that it’s generally more user-friendly to publish full HTML reports, enhanced by smart navigation and search functionalities. Shortened versions often require the user to jump back and forth between HTML and the PDF version which negatively affects usability. One of the most important factors to be considered here is how quickly users can find the information they are looking for. If the full HTML version is designed from that perspective, it is preferable to the shortened summary versions which usually include numerous links to PDF files.

In your research, you identified the Bayer Online Annual Report as the highest-ranking best practice example. What makes it stand out?

Interestingly, there is not one key criterion that makes the Bayer Online Annual Report stand out; rather, it’s the combination of different types of criteria that are covered and applied by the Bayer Annual Report that makes it unique. No other report in my research offered a comparably wide range of functionalities, whether in terms of navigation, hyperlinks supporting understandability or analysis tools. This however doesn’t mean that it is the ideal report – there still remains some significant improvement potential regarding their customization options or the clarity of the starting page, to just name a few.

Which are your personal top-5 online report features?

There are some features I would consider a “must”, which are interestingly not yet applied by all companies offering an online annual report. These include the availability of excel downloads, an intelligent search function including relevance of results, and hyperlinks from the financial statements to the respective notes. In addition, I like the functionality of customized downloads, i.e. the possibility to collect individual pages of the report which can then be downloaded together as one PDF or printed as one summary report based on the users’ individual preferences. Also, Quick Links from the starting page to the most used pages of the annual report are a very useful feature. It is however important to ensure the relevance of these links to all user groups.

Where do you see the most improvement potential throughout the online reports you evaluated in your studies?

There is a wide range of customization opportunities which could significantly impact the usefulness of online annual reports to users. As mentioned above, research has shown that different user groups have different interests regarding the annual report, and the online publication offers the possibility of giving different user groups the information they need much faster than in print or PDF. Unfortunately, the full potential remains yet to be achieved, offering a lot of room for all companies in the analysis to improve in the future.

Where do you see the future of digital reporting?

A key limitation of online annual reports is the comparability of data and reports across companies. Each company designs their own report, causing even the basic structure to be hardly comparable between two firms, let alone all of the DAX30. Technologies such as XBRL offer solutions to this and I expect their usage to increase in the future. In addition, I think usability of online annual reports will be studied further to better understand and address the needs of the various user groups.

Interview: Albert Pichler