I mumble on and on about broadband Internet access. Like leaves dropping from trees, individual financial, social, and personal transactions are migrating on-line. For the best reasons: cost, speed, accuracy, depth, and freedom.
Now add one more mundane exercise: the annual report.
Recognizing this, many companies have scaled back their annual reports in the past decade. They have forsaken the high-concept narratives for what's known as a 10-K wrap—taking the no-nonsense 10-K document filed with the SEC and wrapping it in a few pages of content, usually a letter from the CEO. Fifteen years ago the 10-K wrap was a sign of a corporate hair shirt. In the 1990s, when I interviewed Mel Karmazin, the publicity-shy and frugal CEO of Infinity Broadcasting (and now CEO of Sirius), he boasted that his annual report was nothing more than a 10-K with a cover sheet. Now that's standard practice. According to a survey by the National Investor Relations Institute, in 2006 54 percent of companies reported that their annual reports had morphed into 10-K wraps, up from 47 percent in 2004 and 16 percent in 2002. The percentage is certainly higher today. Among their number: Time Warner and my employer, the Washington Post Co.I have met with irritated pushback from USFR viewers who want me to send them information by mail, or resent my constant references to on-line information. Those who don't have or like Internet communication seem to me to live with the conviction that it's just a few techno-nuts like me that are the problem. This is my great fear.
But today, even the regulators seem to agree that the wrap is a profligate use of paper. In August 2006 the NYSE dropped its rule that companies must send hard-copy annual reports to shareholders (though they must still provide a copy of audited financial statements on request). The SEC still requires companies to provide an annual report to shareholders. But this requirement can be fulfilled with a 10-K or a proxy. Last year the SEC adopted a new rule that said companies, instead of mailing 10-Ks and proxies, can make them available on their Web site so long as they send notice of the availability of these documents to shareholders. They must still provide hard copies upon request. (The rule became effective for larger companies as of Jan. 1, 2008, and will apply to all companies starting next January.) [More]
Those who cannot take the increasingly brief time to learn simple Internet skills will be dispossessed as surely as those who refused to get phones in my father's generation. However correct may be their judgments about the elegance, permanence, and tastefulness of e-mail, for example, it does not alter the fact that the Post Office is a Dead-Letter-Walking.
We need to work to make the right answer the easy answer, and to stop apologizing for progress. I absolutely defend the rights of those who choose not to adapt to new technology, but I also refuse to accommodate their inflexibility.