This is the main finding of an in-depth comparison of the online annual reports of the S&P Global 100 Index companies. The study was conducted jointly by Canadian investor relations Web site evaluator IRWebReport.com and Austrian web production firm GeBer Geschäftsberichte.

"Instead of improving the usability of their reports in light of surveys showing investors have difficulty using online financial reports, this group of prestigious companies has gone backwards," said Dominic Jones, president IRWebReport.com. "By ignoring the usability of their online financial reporting, listed companies are making it harder for time-pressed investors to access information needed to reach informed judgments."

Out of the 100 large-cap companies in the study, only eight met all of the basic usability requirements for online annual reports as recommended by the likes of the London Stock Exchange, the UK Investor Relations Society and various investor associations.

The basic requirements, which allow investors to either view information online or download all or parts of an annual report for offline use, include providing the entire report in navigable HTML for rapid online viewing and reference; offering full and segmented PDF files for printing and offline use; and giving investors downloadable spreadsheets of financial tables for easier data importing and analysis.

In other findings from the survey:

• Only five companies met advanced online viewing standards for their HTML reports, such as providing a good search engine for the report. Royal Dutch Shell scored the highest overall against the advanced HTML report criteria.
  
  
• Only 15 of the 100 companies in the study provided their financials in a spreadsheet to enable investors to more easily import and analyze their data. 
  
  
• Fully 24 study companies published their most recent annual reports only in one PDF file or PDF BLOB – the weakest approach they can take. Three years ago, only 12% of companies did so.
  
  
• The number of companies using image-based reports, which make it impossible for investors, journalists and other researchers to copy and paste information from the report, has risen five-fold from 4% in 2002 to 21% in 2005.
  
  
• The most common approach for publishing annual reports on the Web is in smaller PDF files of individual chapters as well as a single PDF file, adopted by 43% of companies. However, while this approach improves on PDF blobs and image-based reports, it is not suitable for rapid online viewing and information retrieval.
  
  
• Twenty-two per cent of companies in the study provided only highlights or a summary of their annual reports in HTML. Typically, these companies provided the annual report narrative in HTML but offered the financial report only in PDF or in images.

"Like plain language before it, the technical usability of online financial reporting information needs to be addressed. In practice, poor usability has a similar effect as poorly written disclosures. It makes it harder for investors to access the information they are entitled to. In the absence of specific regulations covering the usability of corporate disclosures, companies can deliberately use hard-to-use formats like PDF BLOBs to obstruct access to their information," said Jones.

A full report on the survey is available at: http://www.irwebreport.com/newsroom/annualreports_2005.htm