The Manager in Communication: The Effect of CEOs on Conference Calls

Abstract

To what extent do CEOs influence communication with external stakeholders, and how large is their influence relative to firm level determinants of communication? We address these questions by conducting a variance partitioning analysis of four communication measures extracted from earnings conference calls: the tone of communication, the degree of forward-looking information, concreteness, and the external focus of communication. Our results suggest the CEO effect accounts for 18.9 percent to 30.6 percent of the variance in these measures in conference calls, while the firm effect accounts for 10.7 percent to 20.8 percent. These findings reaffirm that CEOs have a large and independent role to play in influencing communication, while suggesting that their cognitive capabilities are critical in shaping external perceptions related to the firm.