A brief history of annual reports
The idea of communicating with shareholders began in the 17th century. The Dutch East India Company (VOC), established in 1602, was the first company to issue shares to the public and provide reports to shareholders.
Dirck Pietersz Straetmaker’s receipt, 1606. Collection of the Capital Amsterdam Foundation, Amsterdam.
With its broad international investor base, the VOC thought it wise to keep its shareholders informed about their operations, performance, and profitability. Their reports contained financial summaries, profit and loss statements, and details of cargo and trade routes. To boost their appeal to new investors, the VOC also included information about dividends paid to shareholders.
Page from the capital ledger of the Amsterdam branch of the VOC, showing accounts on the left and dividends on the right. National Archives, The Hague, VOC Archives, inv. nr. 7068, fo. 376.
Nearly three centuries later, Robert R. Minturn, Director of the New York and New Haven Railroad Company, produced the first iteration of a more transparent annual report. The year was 1837.
Front cover from 1849 annual report - earliest I could find.
His report included detailed information about the railroad’s financial status, operations, and performance. It contained financial statements, descriptions of the company’s activities, and commentary on its financial health and prospects.
Inside cover and first text page from above annual report.
Jump ahead to 1903. That year, United States Steel Corporation issued its first annual report, which set a new standard for how financial information is communicated to shareholders.
Cover of 1902 annual report
It provided a higher level of financial disclosure and transparency, including an audited balance sheet, income statement, and cash flow statement.
Certification by Price, Waterhouse & Company
It also added narrative sections that offered management's analysis of the company's financial condition, results of operations, and prospects.
As one of the largest, most influential corporations at the time, the reporting practices U.S. Steel introduced led to broader adoption of similar practices across different sectors and industries.
And the modern annual report was born.