Information design and manipulation

Abstract

We discuss the results of an investigation into the graphic reporting practices used by 240 leading UK companies in their 1989 corporate annual reports. Our main findings are that 79 per cent of companies used graphs and that 64 per cent of all graphs were bar/ column graphs. Many of these were poorly designed and constructed. There was evidence of biasing in graphic choices, with the use of graphic presentation being contingent upon 'good' rather than 'bad' financial performance. Companies were three times more likely to include graphs in their annual report which exaggerated, rather than understated, favourable time series trends in key performance variables. There was also evidence of the use of certain design and construction techniques intended to create a favourable visual impression. There is a need for more studies of graphic practices in other domains, and for guidelines to raise the standards and fidelity of financial graphs.