Tone and content analysis in the president’s letters to shareholders: Spanish evidence

УПРАВЛЕНЕЦ 2021. Том 12. № 1 78 Стратегический менеджмент и корпоративное управление DOI: 10.29141/2218-5003-2021-12-1-6 Tone and content analysis in the president’s letters to shareholders: Spanish evidence Enrique Bonsón 1 , David Perea 1 , Graça Azevedo 2 1 University of Huelva, Huelva, Spain 2 University of Aveiro, Aveiro, Portugal Abstract. This article explores the potential factors that might be influencing the length and tone of the discourse of the IBEX35 presidents’ letters to shareholders. It also provides an analysis of their content. The methodological framework of the research relies on the impression management theory, that is, how companies want to present themselves, in a way that contributes to their goals. The research uses an automatic process of textual analysis, through R and Voyant Tools. For tone and length analysis, we used a total of 187 letters corresponding to the years 2013–2018, and for content analysis, a larger sample of 321 letters corresponding to the years 2008–2018. According to the research findings, there was a greater positive tone when the profits after taxes decreased and when the directors’ remuneration increased with respect to the previous year. Regarding content, the research shows that there are differences between non-financial and financial companies. In conclusion, our findings, which show that in certain situations the tone of discourse changes, are supported by and contribute to impression management theory. The study may be of interest to shareholders to better understand the content of the chairpersons’ letters. Keywords: content analysis; positive tone; text mining; financial report. JEL Classification: G30, O10 Funding: This work was prepared with the financial support of the FEDER Andalusia 2014-2020 Operational Program (project UHU-1253498: “Challenges and opportunities for social media in the business and public sector in Andalusia”). Paper submitted: December 16, 2020 For citation: Bonsón E., Perea D., Azevedo G. (2021). Tone and content analysis in the president’s letters to shareholders: Spanish evidence. Upravlenets – The Ma nager, vol.12, no. 1, pp.78–90. DOI: 10.29141/2218-5003-2021-12-1-6. INTRODUCTION Annual reports might variously be viewed as “undisguised advertisement[s]” or as “platforms for preaching [managements’] philosophies and [for] touting themselves and their companies” [Ingram, Frazier, 1983]. The complexity of full financial reports has prompted companies to provide summary reports (including narrative summaries, such as the letters to shareholders) to render reported information more comprehensible [Costa et al., 2013]. The letter to shareholders is written annually by a company’s chief executive officer (CEO), president, or chairperson, and normally precedes the more substantial and detailed annual report of financial data from the previous fiscal year. These messages from the company’s leader are particularly important elements of the annual report, as they typically explain past performance offer a vision for achieving future success [Poole, 2014]. The letter is a promotional genre designed to build and present the corporation’s image [Anderson, Imperia, 1992]. It has enormous rhetorical importance in building credibility and imparting confidence, convincing investors that the company is pursuing sound and effective strategies [Hyland, 1998]. Purportedly intended to simply present objective information regarding a company’s performance and strategy, the letters, however, also serve to project the corporate image and ideology to both existing and potential investors. Negotiating relationships with multiple audiences for multiple purposes results in rhetorical complexity and richness [Poole, 2014]. While the actual financial statements following the letter are often considered the most important items for investors and analysts, the letters have an undeniable influence on investment decisions [Lee, Tweedie, 1981]. The letter is the most read portion of the annual report, and, at one point, 48 % of readers claimed to read the letters thoroughly [Bartlett, Chandler, 1997]. In addition, annual reports and the president’s letter also function to establish credibility and convince readers that the company is “pursuing sound strategy” [Kohut, Segars, 1992]. This letter can be written by the president or the CEO. A president technically has higher powers than a CEO since the latter still has to answer to the board of directors, which is headed by the president. CEOs are concerned with executing strategies that have been approved by the board, and they are the ones who are mostly seen in action. Ultimately, the fate of a CEO rests on how satisfied the board is with what they have done with the company [Chris, 2015]. There are cases where both president and CEO positions are held by the same person, although from one perspective, academics persuasively argue for the separation of the roles on the basis that a clear division of responsibilities better guarantees independent action on behalf of the board [Coombes, Wong, 2004]. UPRAVLENETS/THE MANAGER 2021. Vol. 12. No. 1 Strategic Management and Corporate Governance 79 For the reasons, the letter to shareholders is a particularly important genre and the research to date on such messages is insightful. Exploring content and tone can be an interesting field of research as we show in this study. Therefore, the purpose and objective of this study is to find out the potential factors that might be influencing the length and tone of the discourse of the IBEX35 presidents’ letters to shareholders and it also analyses their content. This paper is organized as follows. First, we present a review of previous studies related to the president`s letter. Next, the sample used and the methodology followed in the research are explained. Then, we present the findings; and finally discuss the main conclusions and avenues for future research. LITERATURE REVIEW In the business context, annual reports and accounts are a means of excellent communication between managers and stakeholders. However, the annual reports and accounts have, in addition to figures, narrative text associated with disclosures that are required by accounting standards, including graphics and images. However, they can be seen as an attempt to control and manipulate users’ perceptions of the financial information disclosed [Clatworthy, Jones, 2001] as they are often associated with the various levels of organizational performance that can, ultimately, make stakeholders to take inappropriate decisions leading to the misallocation of their resources [Brennan, Merkl-Davies, 2013]. However, the investigation began to focus on the presidents’ letters [Aerts, Cheng, 2011; Hooghiemstra, 2001, 2008; Oliveira, Azevedo, Borges, 2016]. Nevertheless, it appears that the research has focused much more on the CEO’s perspective, leaving the presidents’ aside. Researchers have studied the complex interaction between the CEO letter, the company, and the financial statements that together create a social world in which the CEO plays a key role [Jonäll, Rimmel, 2010]. Furthermore, an extensive academic literature explores aspects of the CEO letter to shareholders. Some of them comprise content-analysis studies of expressions of company performance [Abrahamson, Amir, 1996; Clatworthy, Jones, 2006], bankruptcy and/or a companies’ risks of failure [Smith, Taffler, 2000; Tennyson, Ingram, Dugan, 1990], cultural values [Mir, Chatterjee, Rahaman, 2009], and the linguistic features of CEO letters for narrative cues (e.g. metaphors and rhetoric) that are indicative of the influence the communicator is trying to exert on the recipient [Amernic, Craig, 2006; Amernic, Craig, Tourish, 2010; Boudt, Thewissen, 2019; Sydserff, Weetman, 1999; Yan, Aerts, Thewissen, 2019]. Kohut and Segars [1992] assessed whether there are discernible thematic differences between low-performing and high-performing companies and the extent to which “word count, number of sentences, and syllables” differ between the two performance levels. Using a content analysis methodology, Kohut and Segars [1992] determined that high-performing companies were significantly more loquacious than their low-performing counterparts. Interestingly, the researchers concluded that high-performer letters were more likely to refer to past events in their discussion of company performance. In contrast, low performers tended to project more towards the future. Additional studies have also examined presidents’ letters and annual reports’ methods for reporting both positive and negative performance. Clatworthy and Jones [2003] analysed the end-of-year narratives of the top 50 and bottom 50 listed UK companies. From their analysis, they determined that both groups of companies accentuated their performance’s positive aspects, assumed responsibility for success, and deflected blame to external factors. However, Rutherford [2003] reported that poorly performing companies have not used linguistic complexity to obscure negative performance and that the textual complexity of annual reports cannot simply be attributed to performance. The disclosure of the narratives has been playing an increasingly significant role, notably in CEOs’ letters [Craig, Amernic, 2018] and presidents’ statements [Moreno, Jones, Quinn, 2019], among other things. For stakeholders, the narrative disclosures have a purpose: to provide information that is associated with future financial performance and market returns [Li, 2010]. Boudt and Thewissen [2019] analysed the strategic positioning of positive and negative words within a CEO letter as a subtle form of print management. They found that managers tended to present information in such an order that the reader of the CEO letter would have a more positive perception of the underlying message. They considered that the weighted sentiment in a CEO’s letter presents a greater power to predict the company’s performance over the next year as it can divert attention from any negative current performance. Aerts and Yan [2017] used composite style measures of the CEO letter to analyse the dominant rhetorical profiles and qualify them from an impression management perspective. In addition, they examined how institutional differences affected rhetorical profiles by comparing the intensity and contingencies of UK and U.S. companies’ rhetorical profiles. They also used automated text analysis to capture linguistic style characteristics of a panel of UK and U.S. companies and employed factor analyses to determine rhetorical profiles. The authors concluded that there were three prominent rhetorical profiles: an emphatic acclaiming stance, a cautious plausibility-based framing position, and a logic-based rationalizing orientation. The profiles represented distinct self-presentational logics and had different readability effects. Rhetorical impression management was stronger in U.S. companies, but higher expected scrutiny in the U.S. institutional environment affected the sensitivity of rhetorical postures to message credibility and litigation risk, while marginally УПРАВЛЕНЕЦ 2021. Том 12. № 1 80 Стратегический менеджмент и корпоративное управление panies presented the letters for five years only). Presidents’ letters were identified manually through the companies’ annual reports, which are available on their websites in Portable Document Format (PDF). The letters were then processed as shown in Table 1 and Figure 1. Table 1 presents an overview of the textual analysis operations conducted with R statistical advanced software1, categorized in two sections: data preparation and analysis. The first step, importing the texts, included reading the pdf files into a raw text corpus in R. The next step was the string operations and pre-processing cover techniques for manipulating raw texts and processing them into tokens (i.e., units of text, such as words or word stems). In the analysis section, we utilized a dictionary to identify the words expressing a positive tone. The dictionary approach broadly refers to the use of patterns, from simple keywords to complex Boolean queries and regular expressions, to count how often certain concepts occur in texts. Table 1 – An overview of text analysis operations, with the R packages used in this analysis Таблица 1 – Обзор операций текстового анализа с применением статистического пакета «The R Project» Operations R packages R functions Data preparation importing text string processing pdftools Stringr pdf_text() wordcount(), str_count() Analysis Dictionary SentimentAnalysis DictionaryLM Figure 1 shows the flowchart of the analysis detailing every step, R package, and function used. The extraction of the text was done through the “pdf_text()” function of the “pdftools” R package [Ooms, 2020], which returns a character vector of equal length to the number of pages in the PDF file in order to create the sentences or paragraphs. We used it because the pdf format has little semantic structure. Previously, carriage returns were also automatically deleted, and capital letters were converted to lowercase. The total word count contained in each letter was done automatically through the “wordcount” function of the “ngram” R package [Schmidt, Heckendorf, 2017]. All the letters were then automatically analysed using the “str_count” function of the “stringr” R package [Wickham, 2019], which counts the number of matches in a dictionary in a string. We used a list of positive words in the Loughran-Mc- Donald finance-specific dictionary [Loughran, McDonald, 2010] (see Table 2), which has been widely utilized in the finance domain. This dictionary is the “DictionaryLM” function of the “SentimentAnalysis” R package [Feuerriegel, Proellochs, 2019]. Thus, the positive tone of each 1 R Core Team. (2018). R: A Language and Environment for Statistical Computing. Available at: https://www.r-project.org/ increasing the less litigation-sensitive defensive-framing style in U.S. letters. Regarding content analysis, in a preliminary examination of 100 presidents’ letters McConnell, Haslem and Gibson [1986] identified nine recurring themes commonly addressed in discussions of the future. These themes were (1) Confidence, (2) Market Context, (3) Growth, (4) Statement of Strategic Plans, (5) Changing Product Mix, (6) Imminent Losses, (7) Imminent Gains, (8) Positive References to the Years Ahead, and (9) Positive References to the Forthcoming Year. Additionally, Kohut and Segars [1992] examined the content of presidents’ letters of the top and bottom 25 firms of the Fortune 500 and revealed six main themes: (1) environment, (2) growth, (3) operating philosophy, (4) markets and products, (5) unfavourable financial reference, and (6) favourable financial reference. They were able to classify high and low performing firms according to the themes emphasized in the presidents’ letters. A fundamental element of narratives is the use of tone. Hart, Childers and Lind [2013] considered the tone to be more complex than a positive/negative dichotomy, as other authors have considered it [Tan, Ying Wang, Zhou, 2014]. For Hart, Childers and Lind [2013], the nuances of the text may be lost by not recognizing the complexities of tone. Thus, the quality of tone in a narrative can cover a range of attributes, evidencing the depth with which the financial analysis of a given firm can be described. In this sense, several types of narratives, even if for different purposes, approach the stylistic element of “tone” as a tool to detect the reliability of managers’ messages. Tone is seen as a product composed of words that, when accumulated, begin to produce standardized expectations, expressing to recipients something important about the author’s perspective [Fisher, van Staden, Richards, 2019]. Tone is a lexical element that involves words to create social expressions, furnishing a certain connotation to the narrative, which is often called textual feeling [Gatzert, Heidinger, 2020]. In this study, we conducted an automatic process of textual analysis, which can be considered its main contribution from a methodological perspective. We analysed the IBEX35 presidents’ letters to shareholders in an effort to answer the following questions: (RQ1) What is the content, length, and tone of each president’s letter? (RQ2) What factors influence the discourse length of the presidents’ letters? (RQ3) What factors influence a positive tone? METHODOLOGY Sample and Text Extraction The sample for this study consisted of the 32 IBEX35 companies, as of December 2018, that regularly provided access to their presidents’ letters. IBEX35 comprises 90 % of the business of the entire Spanish Stock Exchange. We analysed a total of 187 letters from 2013 to 2018 (five com- UPRAVLENETS/THE MANAGER 2021. Vol. 12. No. 1 Strategic Management and Corporate Governance 81 letter is identifying through this formula: Tone positive = number of positive words in letter / total words of letter. For content analysis, the sample was extended to years 2008–2018. A total of 321 letters were then considered. The analysis was conducted by means of Voyant Tools [Sinclair, Stéfan, Rockwell, 2016], an open source web-based text reading and analysis environment that performs content analysis, allowing large-scale comparisons of a set of texts or corpus. Content analysis is a widely used technique in the social sciences. It can be characterized as the systematic enumeration, coding and classification of words and phrases for the purpose of analysing message content. It is not a fixed analytical technique; rather, it is an approach that offers guidelines for the systematic analysis of written communications. Voyant includes several tools, including “Cirrus” and “Collocates Graph,” to represent the results of the content analysis. “Cirrus” is a word cloud that shows the top frequency words of a corpus or document. “Collocates Graph” represents keywords and terms that occur in proximity as a force directed network graph. Apart from stop words, very frequent words (group, new, million, business, year, company, report, bank) that have no contextual value were removed. Dependent and Independent Variables In the study, we tried to identify potential factors that might influence the length and the tone of the discourse in presidents’ letters, so both length and tone were the dependent variables. The length of letters has been proven to generate primacy effects in longer letters, while a recency effect is pre- Fig. 1. Flowchart of PDF document analysis Рис. 1. Алгоритм анализа pdf-документов с помощью пакета «The R Project» Table 2 – Positive words in the Loughran – McDonald finance dictionary Таблица 2 – Слова с позитивной тональностью согласно финансовому словарю Луграна – МакДональда 354 words able best delighting fantastic inspirational proactive abundance better dependability favorable integrity profitably acclaimed bolstered desirable friendly invent progress accomplish bolstering desired gain leadership rebound accomplished boom dream good loyal regain achieve booming easier great lucrative reward achieved boost effective happiest meritorious satisfaction adequately boosted empower highest opportunities smooth advancement breakthrough enable honor optimistic solves advantageous breakthroughs encouraged ideal outperform transparency alliance brilliant enhance impress perfect tremendous assure charitable enjoy improve pleasant upturn attain collaborate enthusiasm incredible popular vibrant attractive compliment excellence innovate positive win beautiful conclusive exceptional insightful Premier worthy beneficial confident excited inspiration prestige ………. УПРАВЛЕНЕЦ 2021. Том 12. № 1 82 Стратегический менеджмент и корпоративное управление dicted in short but complex letters, in which case it would be to the company’s advantage to present the good news last [Baird, Zelin, 2000]. Thus, this variable has been analysed from an effect-generating perspective, which led us to explore the opposite – that is, possible factors influencing length. Clatworthy and Jones [2003] studied the tone of discourse to examine how companies report good and bad news in different ways, whether the ordering of good news and bad news in a president’s letter could bias investor perceptions [Baird, Zelin, 2000] and the factors of the amount of negativity expressed in presidents’ letters [Abrahamson, Amir, 1996]. The independent variables (Table 3) refer to the increase (with respect to the previous year) of market capitalization (MarkCap), to profit after taxes (PAT), to directors’ remuneration (DirecRemu), and to the sector (Sector) in which the company is included. We have analysed the potential influence of the growth of the company’s MarkCap. This variable has been used in previous literature on disclosure [Healy, Hutton, Palepu, 1999; Skinner, 1994; Verrecchia, 1990]. Abrahamson and Amir [1996] found that MarkCap is significantly lower in firms with low negative tones than in firms with high negative tones. We also analysed the potential impact of the growth or decline of PAT. Companies both with improving and declining performance preferred to take credit for good news themselves, while blaming the external environment for bad news [Clatworthy, Jones, 2003], and both groups placed predominant emphasis on the past [Kohut, Segars, 1992]. DirecRemu is an important aspect of companies’ disclosures to see if moderated executive pay increased or decreased [Clarke, Conyon, Peck, 1998]. Some have suggested that with more information about pay levels on public display, those who are paid less will press for pay increases, since remuneration levels are often set with the help of comparisons with other companies [Hampel, 1998]. For that reason, we decided to explore the potential impact of DirecRemu growth on the presidents’ letters. Company’s Sector is one of the most frequently addressed determinants in voluntary reporting literature. Researchers have provided rather consistent evidence for a significant relationship between these two variables [Bonsón, Bednárová, 2013; Brammer, Pavelin, 2006; Hahn, Kühnen, 2013]. Because of the nature of their companies’ activities, the presidents’ letters of companies operating in different sectors may also differ. In our paper, we considered two groups of sectors. The first group included companies that operate in the financial and insurance sectors. The second group consisted of all others. Accordingly, we verified that finance companies were slightly more likely to publish a CEO letter than were non-finance companies [Costa et al., 2013], which suggests that differences could also be found in relation to our analysis. We collected these independent variables from different sources (Google Finance, Sistema de Análisis de Balances Ibéricos and Comisión Nacional de Mercado de Valores) and treated them as dummy variables. We used these factors in an effort to explain both the discourse length (dependent variable 1) and positive tone (dependent variable 2). The following two logistic regressions were conducted: 𝐷𝑖𝑠𝑐𝐿𝑒𝑛𝑔 = 𝛼 + 𝛽1𝑀𝑎𝑟𝑘𝐶𝑎𝑝 + 𝛽2PAT + + 𝛽3𝐷𝑖𝑟𝑒𝑐𝑅𝑒𝑚𝑢 + 𝛽4𝑆𝑒𝑐𝑡𝑜𝑟 + 𝜖, (1) 𝑃𝑜𝑠𝑖𝑡𝑇𝑜𝑛𝑒 = 𝛼 + 𝛽1𝑀𝑎𝑟𝑘𝐶𝑎𝑝 + 𝛽2PAT + + 𝛽3𝐷𝑖𝑟𝑒𝑐𝑅𝑒𝑚𝑢 + 𝛽4𝑆𝑒𝑐𝑡𝑜𝑟 + 𝜖 . (2) Table 3 – Demographic characteristics of the sample Таблица 3 – Социально-демографические характеристики участников исследования Variable Full Name Shortened Name Description Source Dependent Discourse length DiscLeng 1 = number words above the average. 0 = number words equal or below the average Chairman’s letters Positive tone PositTone 1 = positive words above the average. 0 = positive words equal or below the average Independent Market capitalization MarkCap 1 = market capitalization growth compared to the previous year. 0 = If not Google Finance Profit after taxes PAT 1 = EAT growth compared to the previous year. 0 = If not SABI (Sistema de Análisis de Balances Ibéricos) Directors’ remuneration DirecRemu 1 = Directors’ Remuneration growth compared to the previous year. 0 = If not CNMV: Comisión Nacional de Mercado de Valores Informes de remuneraciones de los consejeros de las sociedades cotizadas 2013 / 2014 / 2015 / 2016 / 2017 /2018 Sector Sector 1 = it is a financial company. 0 = If not Activity of companies themselves UPRAVLENETS/THE MANAGER 2021. Vol. 12. No. 1 Strategic Management and Corporate Governance 83 FINDINGS The maximum discourse length was found to be 92,697 words, and the minimum was 653 words (average=5.152, SD=8.101). The positive tone was very low (average = 1.198 %, SD = 0.649), ranging from 3.72 % to 0.005 %, as shown in Table 4. These results indicate that there was not a homogeneous length or tone among the different letters. Table 4 – Descriptive statistics Таблица 4 – Описательная статистика Maximum Average Minimum Standard Deviation Discourse length, number of words 92.697 5.152 653 8.101 Positive tone, % 3.722 1.198 0.005 0.649 According to our findings, none of the variables studied affected the length (Table 5). While, there was a significant negative relationship between PAT and positive tone, and a significant positive relationship between DirecRemu and positive tone (Table 6). Therefore, presidents’ letters had greater positive tones when the PAT decreased with respect to the previous year and when the DirecRemu increased with respect to the previous year. Table 5 – Multivariate statistics – Generalised Linear Model (Binomial) of Discourse Length Таблица 5 – Многомерная статистика – обобщенная линейная модель (биноминальная) для переменной «Объем текстового обращения к акционерам» Independent variable Dependent variable Discourse Length Estimate z value Sig. (Intercept) –1.354 –3.257 0.0011** Market capitalization –2.028 –0.569 0.569 Profit after taxes 0.379 0.916 0.360 Directors’ Remuneration –0.122 –0.340 0.734 Sector 0.467 1.810 0.238 Note: **Significant at p < 0.01 (2-tailed). Table 6 – Multivariate statistics – Generalised Linear Model (Binomial) of Positive Tone Таблица 6 – Многомерная статистика – обобщенная линейная модель (биноминальная) для переменной «Позитивная тональность» Independent variable Dependent variable Positive Tone Estimate z value Sig. (Intercept) –0.403 –1.146 0.252 Market capitalization 0.059 0.185 0.853 Profit after taxes –0.708 –2.047 0.041* Directors’ Remuneration 0.681 2.099 0.036* Sector 0.254 0.689 0.491 Note: *Significant at p < 0.05 (2-tailed). For the content analysis, we analysed a corpus of 321 documents with 378,267 total words and 19,291 single word forms using Voyant Tools. Figure 2 shows that the most frequent words in the presidents’ letters were “growth” (1,261), followed by “financial” (854) and “shareholders” (794). Nevertheless, the words “customers,” “market,” “management,” and “commitment” were also relevant. Fig. 2. Cirrus of content analysis Рис. 2. Облако результатов контент-анализа Figure 3 shows the context of use of the most frequent words, highlighting that “growth” was mainly related to “markets” (52 times), “opportunities” (58), “potential” (56), and “strategy” (33). The term “financial” related to “strength” (42), “crisis” (49), “results” (49), “sector” (43), and Fig. 3. Collocates graph of content analysis Рис. 3. Наиболее используемые термины и их коллокации в обращениях к акционерам УПРАВЛЕНЕЦ 2021. Том 12. № 1 84 Стратегический менеджмент и корпоративное управление “markets” (52). And “shareholders” was related to “employees” (51), “letter” (45), “meeting” (82), “customers” (76), and “value” (86). To deepen the content analysis, we divided the companies into two groups, financial and non-financial, to identify potential differences between them. For the non-financial companies, a corpus of 250 documents with 273,662 words and 15,345 single word forms was analysed, and for financial companies, we analysed 71 documents with 104,605 total words and 9,018 single word forms. The results are shown on Figures 4 and 5. Figure 4 shows the cirrus of both the non-financial and the financial companies. The most frequent words in the non-financial companies’ presidents’ letters were “growth” (950), followed by “shareholders” (601) and “market” (585). For financial companies, these were “customers” (391), followed by “capital” (316) and “growth” (311). The context of use of the most frequent words is shown in Figure 5. For non-financial companies, “growth” was mainly related to “potential” (38 times), “opportunities” (51) and “market” (62). The term “market” related to “Spanish” (19), “share” (57), “conditions” (18), and “position” (20), and “shareholders” was connected to “customers” (44), “value” (66), “letter” (42), “meeting” (68), and “employees” (35). For financial companies, “customers” was mainly related to “number” (19), “shareholders” (36), “digital” (24), and “trust” (18). The term “capital” related to “ratio” (44), “position” (19), “increase” (21), and “liquidity” (21). And “growth” was linked to the terms “economy” (13), “rate” (9), “potential” (18), “markets” (11), and “model” (9). Fig. 4. Cirrus of non-financial vs. financial companies’ content analysis Рис. 4. Облако основных терминов в обращениях к акционерам финансовых и нефинансовых компаний Fig. 5. Collocates graph of non-financial vs. financial companies’ content analysis Рис. 5. Основные коллокации наиболее используемых терминов в обращениях к акционерам финансовых и нефинансовых компаний UPRAVLENETS/THE MANAGER 2021. Vol. 12. No. 1 Strategic Management and Corporate Governance 85 CONCLUSION Our study shows that presidents’ letters from IBEX35 companies in the period of 2013–2018 differed from each other in terms of length and tone. There was no homogeneous length or tone among them, as Baird and Zelin [2000] reported. The letters had an average length of 5,152 words, and the discourse had a low positive tone (1.198 %). Even so, the positive tone was greater than the negative, since unless it was required, negative results were generally not supposed to appear [Abrahamson, Park, 1994]. It is true that words with a negative connotation could all too easily suggest a prejudicial financial situation [Bournois, Point, 2006]. For this reason, we expected the presidents would avoid a negative tone. Accordingly, although there was a low positive tone, we focused on the positive tone, since negative tones were scarce, if present. None of the studied variables appeared to affect length, but there were certain relationships with tone. For example, when the PAT decreased with respect to the previous year, the letters showed a greater positive tone. This is because the practice of embellishment by omission is frequently used to prevent any real assessment of a company’s performance. We noted the prominence of self‐justification and a certain complacency at the state of things were strongest following a difficult year, which is similar to the findings of Bournois and Point [2006]. This also commonly happens when the DirecRemu increases with respect to the previous year. In this case, the positive tone was greater because the presidents conveyed to their shareholders that their respective companies were doing well. We interpreted this to mean that the presidents justified raising their board’s remuneration and therefore used a more positive tone for shareholders to understand their raises. On the other hand, positive tones were not related to the variation with respect to the previous year of MarkCap nor to the Sector. The content analysis of the letters highlighted the growth of the company as the most frequent topic the presidents discussed, without neglecting the technical aspects (financial and management) and the personal aspects (to their shareholders and customers). This aligns with previous results [Bournois, Point, 2006; Kohut, Segars, 1992; McConnell, Haslem, Gibson, 1986] in which scholars all coincided in identifying growth. Most companies referred to growth, either underlining it as a potential, an opportunity, a strategy, or a market. There were certain differences between the letters’ content of the financial companies and the non-finan- cial ones. While the non-financial firms focused more on the growth, financial companies concentrated mainly on customers. This not only happened in presidents’ letters, but it is also interesting to note that it has been happening during the COVID-19 crisis, financial entities have been more rational in their communication, and have focused especially on explaining how they have helped their clients [Welovroi, 2020]. The contributions of our study are two-fold. First, it fills a gap in the literature. Second, the findings of our study may have practical implications for shareholders, who can understand what can be happen when a higher positive tone is used in chairpersons’ letters. Before closing, several limitations, together with recommendations for future research, have to be acknowledged. The first limitation is about the sample size, which should be extended using a Big Data approach1, since there was no problem in processing the text since it can be done automatically. 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