In this post, I will make three reflections based on an article Mike Krzus and I wrote with the help of Carlos Solano, “Constructing Bank of America’s 2017 Mock Integrate Report: Experiment No. 3.” But first, a little context about two previous mock integrated reports prepared by Mike, one for ExxonMobil and one for Alphabet.

Recap of ExxonMobil’s and Alphabet’s Mock Integrated Reports

On March 21, 2018, I wrote about ExxonMobil’s 2016 Mock Integrated Report. I noted that my co-author and collaborator, Mike Krzus, was able to put together a decent 40-page (compared to 133 pages in its 2016 10-K) integrated report for this $336 billion market cap company based on information ExxonMobil had itself put into the public domain. It only took him about 40 hours to do so, challenging the frequent criticism that integrated reporting is simply too difficult to do. This was an experiment and we had no idea what the results would be before we tried. Several efforts to contact the company for a response have been unsuccessful, despite the fact that my post was largely complimentary about the company’s reporting practices.

Nor have I had any response from my July 6, 2018 post about Alphabet’s 2017 Mock Integrated Report (Alphabet is the $868 billion market cap parent company of Google) although I know it has been brought to the attention of some senior executives at Google. One reason could be that this post was more critical of Alphabet’s reporting practices. As a result, It simply wasn’t possible to produce a decent mock integrated report. The 45-page report is largely a summary of the company’s 105-page 2017 10-K. ExxonMobil has been around much longer, and, because of its industry, it is a much-scrutinized company. Over the years it has improved its disclosures due to these pressures.

Google, the main business unit of Alphabet, is a much younger and less controversial company but that is changing quickly as consumers worry about data privacy, security, and addictive use of tech devices. In fairness, Alphabet discloses substantial information about greenhouse gas emissions, the environmental impacts of its products, and its privacy guidelines. However, it does not publish an annual report which explains, in plain English, such things as the company’s medium- and long-term plans, business risks and opportunities, and the role of the board in reviewing corporate strategy which are essential elements of an integrated report. That being said, I suppose Alphabet is starting to feel more pressure to be more transparent regarding many practices.

I also noted that Alphabet could contribute to its mission to “organize the world’s information and make it universally accessible and useful” by developing an “Integrated Report Generator Tool (IRGT).”  The IRGT would simply use technology to leverage what Mike has done by hand by organizing a company’s reported information to make it universally accessible and useful through a mock integrated report. This would improve stakeholders’ understanding of a company and would challenge the company to produce its own integrated report. To the extent that anybody at Alphabet read this piece, I guess they just didn’t find the idea all that exciting. Corporate reporting is admittedly an acquired taste. While fundamentally important to trillions of dollars of capital allocation decisions made every year, it isn’t as sexy as the new products and technologies announced by Google at its annual developer conference on May 8, 2018.

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