Posts Tagged ‘Conference calls’

Skin in the game: ‘I’ and ‘We’

August 7, 2017

Investors like to know a CEO and other leaders have “skin in the game” – a personal stake in the company’s success in creating value. Now a study by accounting profs at Tulane University suggests that reassuring investors is as simple using the first person on conference calls.

Described in today’s Wall Street Journal (“CEOs’ Simple Trick on Earnings Calls: Saying ‘I,’ ‘We’ and ‘Us’”), the study of investor psychology “found that investors leave with a more positive impression—regardless of a company’s results—when managers use personal pronouns such as ‘I,’ ‘we,’ ‘my,’ ‘ours’ and ‘us,’ or what the researchers refer to as self-inclusive language.”

The study takes two approaches: Analyzing more than 50,000 earnings-call transcripts with a textual-analysis tool, the researchers found that market reactions to the calls were more positive when executives used self-inclusive language. Separately, more than 250 people were asked to make investment decisions after listening to simulated conference calls on a fictional company, Webtex – some using “I/we/us” language and the alternate version referring to “Management” or “Webtex.” First-person language won.

Some companies like to refer to themselves in the third person – as if humility requires saying “The company” or “Management” did such-and-such. Worse yet, they’ll use the passive voice: “Full-year earnings are expected to be $1.80 to $2.00.”

I’ve always thought that using “We” or “Our team” is stronger, allowing management both to take credit for accomplishments and to acknowledge shortcomings. It’s not a matter of ego – it’s a way to affirm that we’re accountable. We have personal skin in the game.

© 2017 Johnson Strategic Communications Inc.





Open mouth, insert … No, wait!

July 8, 2010

“Keeping Your Foot Away From Your Mouth”

This headline in yesterday’s Wall Street Journal piece (p.D1) highlights a common human frailty. Citing gaffes from business leaders, politicians and entertainers, the WSJ says words do matter – and verbal errors can cause lasting damage.

In investor relations, of course, foot-in-mouth syndrome is one of our worst fears. We go to great lengths to avoid selective disclosure, much less erroneous disclosure, of financial information or strategic plans not yet ready for broadcast.

This is why we brainstorm key messages on quarterly earnings or strategic transactions in advance (and put them in writing to use as a reference) … why we write and review drafts of news releases and comments for investor meetings … why we create Q&As for conference calls and corporate events … why we try to make CEOs, CFOs and other spokesmen rehearse speeches and Q&A times.

The gatekeeper role is mission-critical in IR. We exist partly to create a process for orderly disclosure – helping our companies think before they speak.

Of course, some CEOs just are who they are. Most veteran IR people can tell horror stories – on more than one occasion, I’ve rolled my eyes at something coming out of the boss’s mouth. “Did he really say that?” Once the blurting is done, it’s too late for anything but damage control – which often doesn’t work too well.

Maybe one of the key performance indicators in an IR person’s annual goals should read: “Get through the year without anyone in top management sticking their foot in their mouth (at least around our investors).”

Any success stories or tips?

© 2010 Johnson Strategic Communications Inc.

What’s up with live blogging?

March 20, 2009

One of the strange inventions of our new media era is live blogging of conference calls by financial media. What’s up with that? 

Today, for example, The Wall Street Journal is live blogging the Goldman Sachs conference call on its AIG risk. The odd thing is, of course, it’s a conference call – an investor could be listening live to get the news personally in real time.

Live blogging is minute-by-minute, as fast as a reporter can type a summary of what he’s hearing. You read things like this from the WSJ:

10:56: The hold music is Mozart. One of the better symphonies.

11:04: The conference call starts.


11:12: If AIG failed, GS would have been able to collect on its hedges. That is why the company said it had no material exposure to AIG.

11:12: Viniar on AIG collateral: “We also have taxpayer money at GS and it’s our responsibility not to lose it.”

11:13: If GS was fine if AIG failed, how was it fully hedged? Viniar defends not returning some of AIG’s collateral or taking the discount. “We had about $7.5 billion of collateral, and if we had to take a discount on it, then GS would not be fully covered.” …

All well and good, but live blogging reminds me of play-by-play commentary on a basketball game – it lacks something if you don’t watch or hear the game itself. Live blogging is in print, with no video or audio. It’s a step removed – almost live, but not quite.

My thought: An investor who wants to be in the know would listen to the Goldman Sachs call. An investor could follow the live blog at the same time, but there isn’t much value without hearing or seeing the actual event. 

In fact, it’s spring break so I am watching – right now on TV – the University of Kansas play its first-round game in the NCAA men’s basketball tournament. The game is live, and I’m seeing it first-hand.

Wouldn’t it be silly, it occurs to me, to follow the game through a live blog? But wait. Going back to the home page, I see there is a live blog on the KU game … Lagging a few minutes behind what I see on TV, there’s the play-by-play. But I’ve already seen each play before it’s reported. I could multitask and read this almost-live blog for additional commentary – or I could just watch, get all the information I need and enjoy the game. Then, I might read a news story or column in the morning paper to find well-thought-out commentary on what happened (in sports or finance).

News media are in a period of experimentation, and live blogging is part of that. For my money, live blogging of a conference call does not provide a good substitute for listening live. Even then, the value depends on the blogger’s ability to add insightful explanation in real time.

And now, live blogging on conference calls

September 10, 2008

The future is now, as demonstrated by an extraordinary piece of journalism this morning: Floyd Norris, chief financial correspondent for The New York Times, wrote a live blogging commentary on today’s Lehman Brothers conference call with investors.

I have no interest in Lehman (other than wanting to see the U.S. financial system recover and thrive), but Norris’ blog provides an interesting glimpse for investor relations professionals into what is possible – and how much things have changed. Not long ago, it was a big deal for companies to organize conference calls – and then open them up for all investors to hear straight from management.

I’m sure today’s Lehman call isn’t the first IR call to be covered live by bloggers – live blogging at political and business events has become fairly common – but the presence of a New York Times columnist commenting in the blogosphere while the call is going on raises the profile. The blog is indexed with a headline on the front page of

So the blog starts a few minutes before the conference call and follows with eight entries – averaging every 10 minutes or so – telling the online reader what Lehman’s CEO is saying. And commenting on what the company is saying. Norris is a columnist, which is journalism jargon that tells the reader his articles in the print newspaper and the blog contain a good deal of his own opinion. It is, from my observation, well-informed opinion – because he also gathers the facts through old-fashioned reporting.

Consider a sample of the comments, and imagine it’s your company:

He (CEO Dick Fuld) says the firm’s “legacy assets” are losing value. That is a nice way to make it sound like the problems are from the past.

It sounds like they are selling control of Neuberger Berman at a significantly lower price than they paid. … Sounds like the previous owners of Neuberger Berman were good at market timing.

Here’s a quote that may come back to haunt them: “Future writedowns are unlikely.”

At 9:30 Eastern, Norris blogs: “The call is over, in time for the stock to open.”

Conference calls have been public for years, but the prospect of instantaneous, high-visibility commentary online is a bit daunting. Your CEO’s words need to be clear the first time, enough that the message is heard and understood even by the play-by-play commentators. My guess is that many investors were simultaneously listening to the call and monitoring Norris’ blog for the media view.

Live blogging gives new meaning to the old, but good, advice: Be careful what you say – it may end up on the front page of The New York Times … or, we should add,

(Update: While I didn’t realize it at the time, The Wall Street Journal also did live blogging of the Lehman call. Heidi Moore of the newspaper’s “Deal Journal” presented a live, hard-news report, capturing details of what the Lehman executives said in 31 entries – about one every two minutes. So add to the list of places where your CEO or CFO’s words could wind up – say, 60 seconds after they are uttered.)