Disclosure Language, Format, and Quality Standards

Linguistic Requirements, Presentation, and Excellence in Disclosure

First: Introduction

Timely disclosure with accurate content but poor language or disorganized presentation fails to achieve the full purpose of disclosure. Disclosure is communication, and communication requires appropriate language, organized format, and high quality. These dimensions — language, format, quality — distinguish professional companies from those that merely meet minimum requirements. They affect how investors understand the company, how analysts cover it, and how the market values it.

Saudi disclosure requirements have evolved significantly in language and format. Arabic is the original and authoritative language, but English is increasingly required, especially for large companies and dual-listed entities. Technology has opened new possibilities in report design, graphics, and interactive disclosure. This article examines the complete requirements for language, format, and quality, with best practices that distinguish leading companies.

💡  Key Insight Good disclosure is not just what you say, but how you say it and to whom. A retail investor reads differently than an institutional analyst, who reads differently than a journalist. A report that meets everyone’s needs — with appropriate depth and clarity for each audience — is the successful report. This requires deliberate design, not accident.

Second: Language Requirements

1. Arabic Language

1.1 The Default

Arabic is:

• The official language for disclosures in the Kingdom.
• Mandatory for all listed companies.
• For financial statements and reports.
• For immediate disclosures.

1.2 Linguistic Quality

• Classical Arabic.
• Grammatically correct.
• Clear meaning.
• With linguistic review.

1.3 Terminology

• Precise financial and accounting terms.
• Consistency in usage.
• Technical terms explained.
• Avoiding ambiguity.

2. English Language

2.1 Increasing Requirement

English has become necessary for:

• Large companies.
• Dual-listed companies.
• Attracting international investors.
• Aligning with global standards.

2.2 Current Requirements

• Strong encouragement from Tadawul.
• Some disclosures mandatory in English.
• In large issuances (prospectuses).
• For international investors.

2.3 Quality

• Professional translation.
• Not machine.
• Review by native speaker.
• Terminology consistency.

3. Parallel Languages

3.1 Simultaneous Issuance

• Both versions at the same time.
• Without prioritizing one language.
• To ensure investor equality.

3.2 Consistency

• Content matches.
• Same numbers.
• Meaning faithfully translated.
• Without substantial differences.

3.3 Priority in Dispute

• Arabic is the original.
• In case of difference, Arabic prevails.
• Per Saudi law.

4. Other Languages

• Some companies publish in additional languages.
• For specific markets (China, India).
• Optional.
• To attract diverse investors.

Third: Plain Language Principles

1. The “Plain Language” Principle

1.1 The Concept

Plain Language Movement:

• Global movement for clarity.
• In government and financial disclosures.
• Adopted by SEC in the US.
• Growing globally.

1.2 Principles

• Short sentences (15-20 words).
• Common words.
• Concise paragraphs.
• Logical structure.
• Active voice.

1.3 In Saudi Disclosures

• Trend toward clarity.
• But challenge with classical Arabic.
• Balance between formality and clarity.
• Continuous evolution.

2. Avoiding Ambiguity

2.1 Common Problems

• Long complex sentences.
• Unexplained technical terms.
• Excessive hedging.
• “Boilerplate” disclosures.

2.2 Solutions

• Specificity with examples.
• Term definitions.
• Clarification with numbers.
• Direct statement.

3. Honesty and Accuracy

3.1 What to Avoid

• Excessive positivity.
• Hiding negatives.
• False weighting.
• Soft misleading.

3.2 What to Do

• Complete picture.
• Positives and negatives.
• Challenges and opportunities.
• Respectful honesty.

Fourth: Format and Layout

1. Financial Reports

1.1 Official Templates

For financial statements:

• IFRS standards approved by SOCPA.
• Standardized templates.
• Specific arrangement.
• Required notes.

1.2 Layout

• Clear tables.
• Formatted numbers (commas).
• Specified currencies.
• Unit standardization.

2. Annual Reports

2.1 Model Structure

• Cover and Chairman’s message.
• Company overview.
• Strategy and performance.
• Analysis (MD&A).
• Governance.
• Sustainability (ESG).
• Financial statements.
• Appendices.

2.2 Design

• Professional.
• Visually appealing.
• Easy to navigate.
• Consistent.

3. Immediate Disclosures

3.1 The Template

In the IFSAH system:

• Formal template.
• Specified fields.
• Required data.
• Without additional formatting.

3.2 Content

• Clear title.
• Summary at the beginning.
• Details after.
• Context and impact.

Fifth: Visual Elements

1. Tables

1.1 Usage

• For numerical data.
• For comparisons.
• For summaries.
• For clarity.

1.2 Principles

• Clear headers.
• Organized rows and columns.
• Formatted numbers.
• Sources cited.

2. Charts and Graphs

2.1 Types

• Line: for time trends.
• Bar: for comparisons.
• Pie: for proportions.
• Combined: for multi-dimensional display.

2.2 Principles

• Simplicity.
• Clarity.
• Appropriate colors.
• No distortion.

3. Infographics

3.1 Usage

• For summaries.
• For key numbers.
• To capture attention.
• For visual storytelling.

3.2 Principles

• Professional design.
• Accurate information.
• Ease of understanding.
• Consistency with report.

4. Photography

• To enhance narrative.
• Of projects and facilities.
• Of employees and activities.
• With appropriate rights.

📌  Note The global trend toward “Integrated Reporting” combines financial and non-financial disclosures into one coherent report. This approach gives a complete picture of the company: how it creates value over short, medium, and long terms, using multiple capitals (financial, manufactured, intellectual, human, social, natural). Leading Saudi companies gradually adopt this approach.

Sixth: Quantitative and Qualitative Information

1. Quantitative Information

1.1 Financial Indicators

• Revenue.
• Profits.
• EBITDA.
• ROE, ROA.
• Cash flows.
• Growth rates.

1.2 Operational Indicators

• Production.
• Sales.
• Market share.
• Efficiency.

1.3 ESG Indicators

• Emissions.
• Energy consumption.
• Women in leadership ratio.
• Social responsibility investments.

2. Qualitative Information

2.1 Storytelling

• Company story.
• Achievements.
• Challenges.
• Vision.

2.2 Context

• Explaining numbers.
• Reasons.
• Impacts.
• Outlook.

3. Management Discussion (MD&A)

3.1 What It Is

Management Discussion and Analysis:

• Analysis from management.
• Of financial performance.
• Of reasons.
• Of outlook.

3.2 Content

• Business overview.
• Financial results.
• Segment analysis.
• Liquidity and funding sources.
• Material factors.
• Risks.

3.3 Quality

• Honest.
• Balanced.
• Insightful.
• Adds value to investor.

Seventh: Non-Financial Reports

1. Annual Governance Report

1.1 Content

• Board and committee structure.
• Governance policies.
• Compliance with CGR.
• Ethics.

1.2 Quality

• Comprehensive.
• Transparent.
• With examples.
• Not just compliance.

2. Sustainability Report

2.1 Content

• Sustainability strategy.
• Goals and achievements.
• E + S + G.
• International standards.

2.2 Issuance

• Standalone or integrated.
• Annual.
• With external assurance (optional).

3. Management Reports

• Management messages.
• Developments.
• Strategy.
• Professionally.

Eighth: Trend Toward Digitization

1. Interactive Reports

1.1 The Concept

• Web-based reports.
• Interactive.
• With dialogue.
• With search engines.

1.2 Benefits

• Easy access.
• Continuous updating.
• User interaction.
• Engaging.

2. XBRL

2.1 What It Is

eXtensible Business Reporting Language:

• Standardized language.
• To tag financial data.
• Machine-processable.
• Global usage.

2.2 Benefits

• Automated analysis.
• Inter-company comparison.
• Speed.
• Accuracy.

2.3 In Saudi Arabia

• In development.
• Some requirements.
• Future direction.

3. Artificial Intelligence

3.1 In Disclosure

• Generating summaries.
• Analysis.
• Translation.
• Review.

3.2 Warnings

• Human oversight.
• Accuracy.
• Responsibility.
• Ethics.

Ninth: Accessibility and Inclusion

1. For Retail Investors

1.1 Challenges

• Report complexity.
• Financial language.
• Size.

1.2 Solutions

• Executive summaries.
• Simple language.
• Charts and graphics.
• Explainer videos.

2. For Persons with Disabilities

2.1 Requirements

• Readable PDFs.
• Alt text for images.
• Format compatible with assistive technology.

2.2 Standards

• WCAG 2.1 on websites.
• PDF/UA.
• Accessibility practices.

3. For Analysts and Journalists

3.1 Needs

• Detailed data.
• Analyses.
• Comparisons.
• Notes.

3.2 Tools

• Investor Kits.
• Excel/Data files.
• Media Kits.

Tenth: Common Challenges

1. “Balance” Challenge

Between simplicity and depth:

• Solution: layered content.
• Summaries + details.
• For diverse audience.

2. “Translation” Challenge

English quality:

• Solution: specialized translators.
• Linguistic review.
• Terminology consistency.

3. “Volume” Challenge

Massive reports:

• Solution: focus.
• Organization.
• Indices.
• Digital versions.

4. “Updates” Challenge

Outdated information:

• Solution: website.
• Continuous updating.
• Immediate disclosures.

Eleventh: Best Practices

1. At the Language Level

• Clarity: priority.
• Accuracy: in every word.
• Honesty: in negatives.
• Balance: between classical and clear.

2. At the Format Level

• Organization: logically.
• Design: professional.
• Visual elements: serve, not distract.
• Consistency: throughout report.

3. At the Quality Level

• Multiple review: before publication.
• Numerical accuracy: no errors.
• Completeness: no gaps.
• Assurance: external if possible.

4. At the Audience Level

• Diverse audience: according to need.
• Access: for all.
• Interaction: where possible.
• Responsiveness: to feedback.

Conclusion

Disclosure language, format, and quality are not secondary details but essential elements in disclosure effectiveness. Clear language, organized format, and high quality transform disclosure from a compliance procedure into a powerful communication tool with investors and stakeholders. Leading Saudi companies invest heavily in these aspects, producing reports that compete with the best global companies, and attract investment based on their disclosure quality.

With developments in technology and international standards, disclosure enters a new phase: integrated reporting, digitization, XBRL, artificial intelligence, interactivity. Companies anticipating these developments gain competitive advantage. Investment in disclosure quality is not a cost but a strategy: reduces capital cost, attracts investors, and builds strong reputation. As the Saudi capital market grows and Vision 2030 goals focus on attracting foreign investment, disclosure quality becomes more important than ever.

🎯  Essential Points to Remember (1) Arabic is the original, English is increasingly required for large companies. (2) Both versions simultaneously, Arabic is original in disputes. (3) “Plain Language” principle — short sentences, common words, active voice. (4) Avoid ambiguity, excessive hedging, or misleading positivity. (5) Financial statements in IFRS standards, standardized templates. (6) Annual reports: clear structure, professional design, strong MD&A. (7) Visual elements: tables, charts, infographics, photos — serve, not distract. (8) Trend toward integrated reporting. (9) Digitization coming: XBRL, AI, interactive reports. (10) Accessibility for all: individuals, persons with disabilities, analysts.

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FAQS

How can companies improve the visual quality of their financial and annual reports?

Companies should utilize clear tables with standardized units, professional infographics for visual storytelling, and accurately labeled charts. These visual elements must serve to clarify data rather than distract, while maintaining consistency throughout the entire report.

References and Sources

• Rules on the Offer of Securities and Continuing Obligations (OSCO).
• Corporate Governance Regulations — Disclosure Requirements.
• IFRS Standards approved by SOCPA.
• Tadawul Issuer Guides.
• SEC Plain English Handbook.
• International Integrated Reporting Council (IIRC).
• XBRL International.
• WCAG 2.1 Web Accessibility Guidelines.
• PwC, KPMG, EY, Deloitte — Annual Reporting Guides.
• Plain Language Association International (PLAIN).