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Are there Language Markers of Hubris in CEO Letters to Shareholders?

Author

Listed:
  • Russell Craig

    (Portsmouth Business School
    Victoria University)

  • Joel Amernic

    (University of Toronto)

Abstract

This paper explores whether DICTION text analysis software reveals distinctive language markers of a verbal tone of hubris in annual letters to shareholders signed by CEOs of major companies. We analyze 193 letters to shareholders, comprising about 368,000 words, focusing initially on 23 letters signed by CEOs who are alleged to be hubristic: Browne (BP), Goodwin (Royal Bank of Scotland), and Murdoch (News). Their language use is statistically significantly high in terms of the DICTION master variable, REALISM. Based on further analysis, we contend that language high in REALISM is not a distinctive marker of hubris but is likely to be a genre effect that is common in CEO letters to shareholders. We draw attention to the restricted capacity of DICTION to capture subtlety of language in CEO letters to shareholders.

Suggested Citation

  • Russell Craig & Joel Amernic, 2018. "Are there Language Markers of Hubris in CEO Letters to Shareholders?," Journal of Business Ethics, Springer, vol. 149(4), pages 973-986, June.
    • Handle: RePEc:kap:jbuset:v:149:y:2018:i:4:d:10.1007_s10551-016-3100-3
    DOI: 10.1007/s10551-016-3100-3
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    References listed on IDEAS

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    1. Niamh M. Brennan & John P. Conroy, 2013. "Executive hubris: the case of a bank CEO," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 26(2), pages 172-195, February.
    2. Joel Amernic & Russell Craig, 2013. "Leadership Discourse, Culture, and Corporate Ethics: CEO-speak at News Corporation," Journal of Business Ethics, Springer, vol. 118(2), pages 379-394, December.
    3. Russell Craig & Joel Amernic, 2011. "Detecting Linguistic Traces of Destructive Narcissism At-a-Distance in a CEO’s Letter to Shareholders," Journal of Business Ethics, Springer, vol. 101(4), pages 563-575, July.
    4. Roll, Richard, 1986. "The Hubris Hypothesis of Corporate Takeovers," The Journal of Business, University of Chicago Press, vol. 59(2), pages 197-216, April.
    5. Joel Amernic & Russell Craig, 2010. "Accounting as a Facilitator of Extreme Narcissism," Journal of Business Ethics, Springer, vol. 96(1), pages 79-93, September.
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    Cited by:

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    3. Alastair Marais, 2024. "Audit Quality and Financial Statement Manipulation: The Moderating Effect of Tone at the Top," International Journal of Economics and Financial Issues, Econjournals, vol. 14(5), pages 220-232, September.
    4. Beatriz García-Ortega & Blanca de-Miguel-Molina & Javier Galán-Cubillo, 2019. "Examining CEOs’ Moral Reasoning in the Automotive Industry," Sustainability, MDPI, vol. 11(21), pages 1-24, October.
    5. Enrique Bonson & David Perea & Graca Azevedo, 2021. "Tone and content analysis in the president’s letters to shareholders: Spanish evidence," Upravlenets, Ural State University of Economics, vol. 12(1), pages 78-90, March.
    6. Li, Yi-Na & Li, Yan & Chen, Haipeng (Allan) & Wei, Jiuchang, 2023. "How verbal and non-verbal cues in a CEO apology for a corporate crisis affect a firm’s social disapproval," Journal of Business Research, Elsevier, vol. 167(C).
    7. Xi Fu & Xiaoxi Wu & Zhifang Zhang, 2021. "The Information Role of Earnings Conference Call Tone: Evidence from Stock Price Crash Risk," Journal of Business Ethics, Springer, vol. 173(3), pages 643-660, October.
    8. Runesson, Emmeli & Samani, Niuosha, 2023. "Goodwill or “No-will”: Hubris in the tone at the top," Journal of Contemporary Accounting and Economics, Elsevier, vol. 19(1).
    9. Raghavendra, Ananya Hadadi & Bala, Pradip Kumar & Mukherjee, Arindam, 2024. "Text mining analysis of retail and consumer service leaders' sustainability narratives: Are they actually true?," Journal of Retailing and Consumer Services, Elsevier, vol. 80(C).
    10. Michele Gendelsky de Oliveira & Graça Azevedo & Jonas Oliveira, 2021. "The Relationship between the Company’s Value and the Tone of the Risk-Related Narratives: The Case of Portugal," Economies, MDPI, vol. 9(2), pages 1-28, May.
    11. Yonatan Shertzer & Yael Brender-Ilan, 2023. "Why Do Leaders Escalate Their Commitment to a Failed Course of Action? A Moderated-Mediation Personality Traits Model," SAGE Open, , vol. 13(1), pages 21582440231, February.
    12. Johannes Brunzel, 2023. "Linguistic cues of chief executive officer personality and its effect on performance," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 215-243, January.
    13. Lin, Fengyi & Lin, Sheng-Wei & Fang, Wen-Chang, 2022. "Impact of CEO narcissism and hubris on corporate sustainability and firm performance," The North American Journal of Economics and Finance, Elsevier, vol. 59(C).
    14. Vita Akstinaite & Graham Robinson & Eugene Sadler-Smith, 2020. "Linguistic Markers of CEO Hubris," Journal of Business Ethics, Springer, vol. 167(4), pages 687-705, December.

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