Improving CEO-Speak

The CPA as communications adviser.



A CEO’s words are powerful storytelling tools, fashioning opinions and offering an important point of view. In an era of heightened corporate accountability, when companies and their CEOs are subject to ever increasing scrutiny by audit committees, regulatory authorities and the public, CEOs frequently need to be reminded of the power of their CEO-speak—the language they use in speeches, letters to shareholders, press releases and other written communications.

In our experience some CEOs have found the public communication of accounting information to be troublesome. While CPAs aren’t generally responsible for corporate communications, they can help improve the words and images CEOs and other members of senior management use to convey accounting information. CPAs who serve as CFOs may take a more direct role in providing advice to CEOs on business language. But there are many indirect opportunities for other CPAs to influence a CEO’s business communications as well.

The increased use of Web sites for corporate communication has intensified the level of public scrutiny of companies and CEOs. When a CEO’s words are posted on the Internet they become widely accessible, reaching a worldwide audience of billions instantaneously. People can locate the CEO’s words easily using a search engine, download them quickly and analyze them using text-analysis software. Here are some strategies we recommend CPAs use to help senior management communicate financial information more clearly to stakeholders.

Craft a coherent and consistent message. CPAs can help management monitor whether the words the company uses to describe accounting and financial matters are coherent and consistent across all settings—in MD&A documents, regulatory filings, press releases and speeches. The words written and uttered by a CEO about accounting and financial reporting matters should be consistent with the numerical data and narrative disclosures in financial statements.

Develop the CEO’s financial literacy. Help your CEO understand the subtleties of accounting and the level of skepticism required when interpreting financial statements. Encourage management to be alert to the words, images and language best suited to describe the accounting measurements that arise from the discretions permitted by GAAP.

Be careful of metaphors. Remain alert to how unsuitable some of the metaphors CEOs use are. In particular, stress the distorting impact of a subtle but insidious metaphor that has gained widespread currency: “Financial statements are a truth-telling lens.” This metaphor reinforces the falsehood that there is one objective financial reality regarding a company and invites the belief that a single set of financial statements is an unimpeachably true and faithful lens portraying that reality. Such a view is unjustified because of the vagaries of accounting rules, assumptions and cost-allocation techniques. At best, GAAP-based financial statements provide an opaque portal to the corporation—one that requires considerable skill to interpret and describe.

Beware of imprecise style. Help highlight any abuses of words or images in management’s commentary on accounting matters. Draw attention to ambiguities, buzzwords, clichés and euphemisms. Encourage CEOs to avoid exaggeration, hubris, deceit, gibberish, technical jargon, inappropriate metaphors and trite platitudes. It’s also good to remind CEOs that the language examples they provide set the tone for the entire company—both internally and externally. Their words permeate the company and gain even broader currency if they are imitated by politicians and the media.

Avoid the sounds of silence. Encourage your CEO to write about accounting and financial performance in a way that is understandable, relevant, complete and honest. Companies should make a concerted effort to be evenhanded, to disclose the good news and the bad, and to ensure there are no “silences” in accountability disclosures. Reporting bad news may not be easy for a CEO because of the possible consequences to his or her reputation and the company’s stock price. Help ease the difficulties in reporting bad news by softening market expectations where those expectations are inflated.

Ensure Web site transparency. What a company posts on its Web site is largely unregulated. Remind your CEO of his or her responsibility to carefully monitor the design of the company’s site. Does it facilitate full and objective financial accountability, or is it principally directed at manufacturing consent for corporate activity? Be sure your CEO realizes how easily public attitudes and behaviors can be influenced by the positioning, content, size, shape and color of hyperlinks. Many sites seem to disclose bad news summarily or conceal hyperlinks to make bad news difficult to find.

Encourage review and reflection. No matter how experienced or esteemed they are, all CEOs should be self-reflective and diligent critics of their own written communications. CPAs should urge them to go beyond the advice of public relations “spin doctors” and solicit critical comment from other members of the top management team—especially the CFO, internal and external auditors and a trusted in-house contrarian. Critical review of CEO-speak should be a formal protocol in internal audit processes.

The place to start improving the language CEOs use is in the educational system leading to certification as a CPA. University business schools should be infused with courses focusing on critical textual analysis (especially of metaphor and rhetoric) to better prepare graduates to understand the language of accountability. They should make sure their courses address how the words and language a CEO uses affect, and are affected by, accounting. The accounting profession also should consider making changes to continuing professional education programs to help current CPAs provide the highest calibre advice about the language of accounting.

CPAs should not let management become so concerned about the numbers that they ignore the accompanying text. Words matter. CEO-speak matters. And CPAs are in a position to help CEOs do a better job of communicating financial information.

Joel Amernic, FCA, is a professor on the Rotman Faculty of Management, University of Toronto, Canada. Russell Craig, FCPA, is a professor at the National Graduate School of Management, Australian National University, Canberra. They are the authors of CEO-Speak: The Language of Corporate Leadership. Their e-mail addresses are and , respectively.


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