An examination of persuasion in the CEO's letter of company annual reports

Abstract

The Chief Executive Officer’s (CEO’s) letter is increasingly regarded as a promotional tool to market the image of corporation while allowing directors to validate the past company performance and project its future business. This interpersonal function is central to effective interaction; however, little attention has been placed on corporate communication. The current study bridges this gap by investigating the use of rhetorical strategies as a tool to convey persuasive arguments and engage readers in this high-stake genre. Persuasion in written communication is often researched under the notions of evaluation, stance and appraisal. Drawing on Hyland’s (2005b) Stance and Engagement framework, I aim to explore how the discoursally-constructed CEOs enact leadership through presenting their claims, projecting a credible persona of themselves, the senior management and the company as well as engaging with investors to establish solidarity. Stance refers to writers’ textual voice concerning their conscious presence in a text, commitment to the statement or the attitude towards it or the reader. It is realised by self-mention, boosters, hedges and attitude markers while engagement concerns strategies that draw readers into the discourse to gain their recognition of the argument. Based on a self-built 1.03 million corpus of 618 CEOs’ letters from 293 and 325 US and Chinese companies listed in the two global stock markets, New York and Hong Kong, the study sets out to explore how stance and engagement markers are rhetorically used to achieve corporate image construction. Perspectives like organisational culture, national influence and company size were examined. The corpus analysis is further supplemented with responses from institutional investors on the impact of the rhetorical markers on their perception of company. The findings indicate that stance and engagement markers are strongly associated with the positive image construction of company management and business performance. In particular, author stance markers are much more frequently used compared with engagement markers in making the CEOs themselves visible in the text so as to project a favourable impression of the financial performance and to take credit of company success by varying their commitment to the information presented to influence reader perception. While the results show general consensus among the financial community on the use of markers, there are, however, substantial differences in the frequency of occurrences in the Chinese and US-based Letters. The latter clearly favours their use in communicating with stakeholders. This may be due to the differences in genre and audience awareness, organisational goals, and the cultural preference on success claiming, expressions of emotions and relationship management in corporate communication. The data also indicate that both large and small corporations employ much more markers to project a positive picture of themselves compared with medium firms. This could stem from the upward movement of small firms and the abundant resources of large corporations respectively. The corpus findings yield insightful understanding of the argumentative strategies adopted by business leaders of different backgrounds in interacting with stakeholders. The results have implications for corporate communication, cross-cultural organisational interactions as well as teaching in finance and communication subjects.