CEOs showing humanity: Seemingly generic human care statements in conference calls and stock market performance during crisis

Published in: Academy of Management Discoveries – 11 March 2024

Written by 

Lauren C. Howe, Laura M. Giurge, Alexander Wagner and Jochen Menges

Summary 

What we found: In our analysis of CEO statements during conference calls amidst the COVID-19 pandemic, we observed that CEOs who expressed human care, despite these statements lacking direct financial relevance, experienced better stock market performance during global stock downturns. Furthermore, we found a negative association between CEO human care statements and stock volatility, indicating that market participants discounted these companies’ future earnings less.

Why it matters: These results highlight the impact of CEO statements that go beyond financial information, emphasizing the importance of expressing humanity in communication with market participants. Understanding how such statements influence market reactions during times of crisis can inform CEO communication strategies and contribute to more resilient organizational performance.

What next: Organizations and leaders can leverage these findings to refine their communication strategies, encouraging CEOs to express human care in their interactions with market participants, particularly during times of crisis. By demonstrating empathy and concern for people, CEOs can potentially mitigate market volatility and enhance investor confidence in the company's future prospects. This underscores the importance of considering not only financial data but also human-centric communication in shaping market perceptions and outcomes.