Elements in an Annual Report’s Chairman’s Message

A message from your company’s Chairman is a crucial element that stakeholders look forward to in your Annual Report. It is an important discretionary disclosure that presents your company’s current positioning from the point of view of one of the most important members of the Board.

What is the purpose of a Chairman’s message or letter?

The letter provides a broad overview of the macroeconomic environment against which the company ran its operations, the challenges faced, if any, the company’s financial and sustainability performance, and the plans for a better future. It could provide your investors with a broad overview of your firm if they are analysing it for investment.

What does a Chairman’s message include?
  • The introduction of the Chairman’s message highlights significant events of the year such as the global pandemic, trends affecting the business, geopolitical crisis, recession or any other trend that may have a material impact on business operations, followed by a brief outline of how the Company weathered the storm.
  • The Chairman discusses the highlights of the year, elaborating on the financial performance of the Company through metrics such as the Net Sales, EBITDA, PAT and the drivers for growth. They also explain how the company’s segments or verticals performed, outlining any new trends that contributed to the growth. Also, the section mentions the key steps, initiatives, programs and crucial decisions taken by the senior management and leadership team to navigate operational challenges. It also probes into detailed operational achievements such as new store expansion, new market penetration, portfolio expansion, the launch of new initiatives, product line expansion, acquisitions and mergers, strategic partnerships, etc.
  • The message should also contain a summary of the non-financial or sustainability performance of the company. Providing tangible, credible demonstrations of the company’s level of sustainability positions the company as a responsible corporate citizen in the minds of stakeholders.
  • Other information can include awards won, products launched, innovations undertaken, changes in leadership and any issue particular to the company that needs to be addressed.
  • Finally, the Chairman concludes with a way forward or a future outlook for the Company and expresses his gratitude to all the stakeholders of the Company.

The Chairman’s message of an Annual Report is a one-stop-destination to get comprehensive and first-hand information about the Company. With all the financial figures and operational performance, it gives busy readers the necessary information in a nutshell - brief and concise. The message is also a great way to gain the trust of employees and existing investors and shareholders, and build brand recognition in the minds of potential stakeholders.

At Report Yak, we help businesses by creating high-quality content for their reports, and drafting the Chairman’s message is one of our focus areas. Get in touch with us to create a game-changing report for you.