“Covid-19” is mentioned as many as 26 times in RB’s (Reckitt Benckiser’s) Annual Report of 2019. Surely, such a recurring mention should be considered significant when the pandemic was an unknown event even six months ago.

The impact of Covid-19 on corporates across the industrial, manufacturing and services spectrum will undoubtedly be grave, as government-enforced lockdowns to contain the spread of the virulence will have a huge unintended negative economic impact. Many countries around the world have already crumbled in curbing the pandemic and have slid into recession. Yet, India is placed favourably when one considers the fact that the country is expected to be among the handful to report a positive GDP (gross domestic product) growth in 2020-21, confronting and surmounting the typical challenges of a developing nation. Such economic resilience is expected to pivot the country far better for revival than most other nations of the world.

Though India Inc will ostensibly be impacted because of the trade standstill and there will be balance sheet impairment, how these companies present their “pitch” report to the external community will be vital for their investment case. Shareholders will use the messaging as a yardstick to judge the safety of their investments. Analysts will be keen to evaluate corporate responses taken towards ensuring business sustainability. Regulators will ramp-up scrutiny and will be keen to assess how corporate compliance has been tested in these unsettling times.

So, reading RB’s annual report got me thinking: In disruptive times such as these, how should companies in India develop their annual reporting framework that is palliative and yet consistent with presenting a true and fair picture? How should the annual report be crafted as a strategic tool to enhance engagement with stakeholders?

Here are a few possible forward-looking suggestions.

1. Investors will most certainly judge the company’s investment case or, in other words, its ability to adapt and deal with the “new” normal. Hence, portrayal of the investment case could be the centerpiece of the reporting framework, with clear articulation of the business’ enduring core competencies and its “moat” against any external pressures and challenges.

2. In the prevalent complex and uncertain environment, the need of the hour is for companies to nuance statements in their annual reports to reflect an accurate picture of the impact of the pandemic on their operations – and the strategies unleashed to limit or offset any negative impacts. Such information articulation at the front and center of the framework will ensure that shareholders and readers will have upfront access to such information, while also building the company’s credibility as being forthright and transparent in information disclosure.

3. A thorough analysis through scenario-planning (and even some soul-searching) will support companies in exploring the impact Covid-19 has had – and will have – on their operations. Shareholders and investors will rely on this presentation and will appreciate when companies are honest about their survival kit. In such a context, “integrated reporting”, or the framework that bridges the most distance between doing and reporting, will provide a convenient roadmap.

4. Assurance and optimism will represent few crucial parts of the reporting framework and shareholders and stakeholders will search for the essence of these in the pages of the report. So, companies will have to find ways and means to fulfill this need. One of the ways to do so is to ensure that the “badge” or “concept” of the annual report reflects the essence of positivity and progress, which needs to then be woven across the report to present a unified picture. While the prevalent scenario has an understandable negative sentiment, companies have their task cut out to transmit hope through the written word, while articulating clearly their company’s current performance and future preparedness.

5. The Chairman’s message to shareholders will arguably be the most critical communication piece and readers will draw most of their inferences reading this statement. While companies often overlook brevity in their quest to highlight this section the most, the approach here needs to be nuanced, direct and plainspoken, underpinned by an honest assessment of how the industry and company were impacted by Covid and the normalisation measures taken up to restore business momentum. Shareholders especially will read between the lines to understand the body language of the leadership.

6. The CEO’s or MD’s statement is sometimes given a bypass. Yet it is the second most crucial analytical message that shareholders will rely on to get a grip on organisational adaptability and agility, while also assessing how the business is working towards addressing / serving / catalysing major Covid-induced consumption shifts. Pockets of inherent value here should be identified and reflected well to build optimism and the investment case, and the management commentary here should represent confidence and positivity with a sense of realism.

7. Covid will occupy pole position in risk reporting. Backup or business restoration and normalisation plans should be communicated to soothe stakeholder expectations of readiness and promptness against any future shocks. Further, companies will have to showcase a more “dynamic” approach to risk management, based more on sensing, feeling and reacting to perceived and fast-moving threats. For companies that rely on technology and data for business conduct, strategies such as work from home (WFH) could be brought into the realm of showcasing risk mitigation and business sustenance in the face of unforeseen exigencies.

8. Corporate social responsibility, unlike earlier, has emerged as a strategic chapter to express the legitimacy of a business in serving extended communities, while also defining its social license to operate. Relief against Covid can be at the heart of social responsibility reporting, enabling companies to build their reputations, while showcasing a genuine desire to help. Linking rehabilitation initiatives with the SDGs (sustainable development goals), especially in the context of Covid, will only reflect corporate seriousness in deepening engagement in addressing major national challenges.

While it is true that the annual report is the most important link between a company and its shareholders, this truism is amplified in black swan events such as what the world is witnessing right now. In times such as these, the annual report will only more actively influence major portfolio decisions, and hence crafting the right message and calibrating the right tone will perhaps be more important now than ever before.