Abstract
M.Inf.
The Internet is a cost-effective and efficient way of distributing information to all stakeholders in a transparent, globalised business environment. It is imperative that companies adopt the Internet as a distribution method for corporate annual report information to remain competitive.
The aim of this study was to determine the current state and level of adoption of the Internet as a delivery and communication mechanism for disseminating online/digital annual reports in the largest listed companies in South Africa. The population selected for the survey was the 2001 Financial Mail top 300 (SA Giants) companies based on total assets. The research was conducted by analysing the corporate websites of the selected companies. The survey was done to establish whether a corporate website existed and, if so, whether the full annual report was available and electronic format used. The aim of this study was to ascertain how many companies in South Africa are publishing full annual reports on the Web.
The research consisted of a literature review and empirical study. The purpose of the literature review was to establish whether previous research exists in this field in South Africa. The results of the international literature review were compared to South Africa to determine whether the country is lagging behind global trends in this arena.
The typical users, function, content and shortcomings of the annual report were identified. The benefits of and problems with digital annual reports for companies and stakeholders were described.
Results indicate that the top 100 South African companies have increased their corporate Web presence from 43% in 1999 to 92% in 2002. Top 100 companies with annual reports on the Internet increased from 11% in 1999 to 84% in 2002.
Results indicated that 227 (75,6%) of the top 300 companies had a website and 31 (10,3%) had no home page. The websites were also analysed to investigate how many companies had detailed electronic annual reports available. The study showed that 179 (59,6%) companies had digital annual reports and 48 (16,0%) had no digital annual report available on the Internet. Of the companies surveyed, 131 (43,6%) had their annual reports in PDF format and 58 (19,3%) in HTML. Only 38 companies (12,6%) presented annual reports in HTML and PDF format on the Internet. Very few companies provide users with the functionality to download data in spreadsheet format for manipulation. Only 7 companies (2,3%) offered this feature.
This study also investigated the relationship between digital annual reports (dependent variable) and company characteristics (independent variable). The two independent variables chosen were profitability and industry type. The two dependent variables chosen were a corporate Web presence and digital annual reports. It can be concluded that there is a significant association between industry sector and digital annual reports, with 63,6% companies in the industrial sector with digital annual reports, compared to 82,1% in the financial sector and 77,4% in the mining resources sector. The conclusion can be drawn that there is no significant correlation between companies with a Web presence and the industry type in which each company operates. Of the companies in the industrial sector, 85,8% had Web presence compared to 92,3% in the financial sector and 90,3% in the mining resources sector.
The investigation revealed that it is the profitable companies in South Africa with a corporate Web presence and with digital annual reports on their corporate websites.