CEOs Showing Humanity: Human Care Statements in Conference Calls and Stock Market Performance During Crisis

Swiss Finance Institute Research Paper No. 24-19

Academy of Management Discoveries, forthcoming

71 Pages Posted: 1 Mar 2024 Last revised: 13 Mar 2024

See all articles by Lauren C. Howe

Lauren C. Howe

University of Zurich

Laura Giurge

London School of Economics

Alexander F. Wagner

University of Zurich - Department of Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute

Jochen I. Menges

University of Zurich

Date Written: February 29, 2024

Abstract

Conference calls provide opportunities for CEOs to inform market participants (i.e., financial analysts and investors) about their companies’ prospects. Much research has focused on how CEOs speak about business-related topics in these calls, yet surprisingly the literature has not considered how statements that go beyond financial information affect market participants. When we explored archival data of how CEOs of publicly traded U.S.-based companies from the Russell 3000 Index spoke about COVID-19 in conference calls as the pandemic began in 2020, we noticed that about half of CEOs made human care statements that expressed a concern for people, with seemingly little direct financial relevance. However, although these statements were largely generic, vague expressions rather than clear plans, we discovered that the more such statements CEOs made, the better their companies fared on the stock market when stock prices tumbled globally. Follow-up explorations unveiled a negative association between CEO human care statements and stock volatility, meaning that market participants discounted these companies’ future earnings less. Our explorations suggest that it pays off for CEOs to go beyond mere financial information and show some humanity, with implications for downstream theorizing about CEO impression management.

Keywords: financial analysts, CEOs, conference calls, impression management, stock market

Suggested Citation

Howe, Lauren C. and Giurge, Laura and Wagner, Alexander F. and Menges, Jochen I., CEOs Showing Humanity: Human Care Statements in Conference Calls and Stock Market Performance During Crisis (February 29, 2024). Swiss Finance Institute Research Paper No. 24-19, Academy of Management Discoveries, forthcoming, Available at SSRN: https://ssrn.com/abstract=4742991 or http://dx.doi.org/10.2139/ssrn.4742991

Lauren C. Howe

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

Laura Giurge

London School of Economics ( email )

Alexander F. Wagner (Contact Author)

University of Zurich - Department of Finance ( email )

Plattenstr 32
Zurich, 8032
Switzerland

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Swiss Finance Institute ( email )

Switzerland

HOME PAGE: http://www.alex-wagner.com

Jochen I. Menges

University of Zurich ( email )

Rämistrasse 71
Zürich, CH-8006
Switzerland

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