Journal of Business Ethics

, Volume 124, Issue 1, pp 19–34 | Cite as

Is the Optimism in CEO’s Letters to Shareholders Sincere? Impression Management Versus Communicative Action During the Economic Crisis



In this study, we explore the sincerity of the rhetorical tone of 664 annual letters to shareholders (CEO letters). Prior studies adopt Impression Management theory to predict that firms obfuscate failures and emphasize successes to unfairly enhance their image and maintain organizational legitimacy. Yuthas et al. (J Bus Ethics 41:141–157, 2002) challenged such a view, showing that firms reporting earnings surprises engage in ethical discourse with shareholders. We adopt the methodology of Yuthas et al. (J Bus Ethics 41:141–157, 2002) to explore the association between firm performance and the rhetorical features of CEO letters in a large sample of Fortune 500 firms in the wake of the global economic crisis. In contrast to most prior research, we find that optimistic tone is congruent with both past and future performance. We conclude that under tough macroeconomic conditions, incentives to distort public information strategically are low. Rather, firms tend to engage in communicative action aimed at dialoguing with shareholders through sincere disclosure. However, in our conclusions, we warn about the impact of accounting and rhetorical manipulation on the congruence between optimistic tone and financial performance.


Discourse ethics Optimism DICTION Impression management Economic crisis 



The authors would like to acknowledge Amanda Murphy, Philipp Schaberl, and Robert Giacalone for their comments on previous versions of this manuscript.


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Copyright information

© Springer Science+Business Media Dordrecht 2013

Authors and Affiliations

  1. 1.School of Accountancy, Daniels College of BusinessUniversity of DenverDenverUSA
  2. 2.ALTIS-Postgraduate School Business and SocietyUniversità Cattolica del Sacro CuoreMilanItaly

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