Communication in CEO Letters before, during and after the Great Financial Crisis in 2008 -A study of two companies in the real estate industry in Sweden

摘要

Background and problem discussion: In 2008 a financial crisis was set off by the burstof a real estate bubble. For many private stakeholders the crisis came more or less as asurprise since they had not anticipated that something like this could occur. Since manyrely on the information stated in the annual reports of the companies it is important thatthis information is relevant and reliable. One of the three most read parts in annual reportsare the CEO letters - personal letters written by the CEOs. There has been a debate aboutthe usefulness of the information stated in these CEO letters. Does it give a true and fairview of the company or is it just a rhetorical tool to convince stakeholders? As astakeholder it is important to be able to rely on all the information given in annualreports, both in good times and in bad times. Considering this the authors find itinteresting to examine how the communication in CEO letters differs before, during andafter the crisis and how it reflects the financial result.Purpose: The purpose is to study the CEO letters of two Swedish real estate companiesand examine how the communication differs and how it reflects the financial resultsbefore, during and after the great financial crisis in 2008.Methodology: A textual analysis was performed on three CEO letters each, of twoSwedish real estate companies, Fabege and Castellum. Two kinds of methods for textualanalysis were used – content analysis and rhetorical analysis.Results and conclusions: The communication did change when the financial crisisoccurred but how it differed was not entirely the same in the examined companies.Fabege became more personal and disclosed more while Castellum became less personalwith less disclosure during the financial crisis. Still, some similarities were observed.There was no tendency of any of the companies communicating more responsibilityduring the crisis but instead they both blamed their operational environment for the pooroutcomes in greater extent. Both also made greater attempts to engage the readers andcreate interest during and after the crisis. The theoretical framework could not explain alldifferences – the authors found that other factors than the financial outcomes affected thecommunication. How the information stated in the CEO letters reflected the financialresults also differed throughout the years. During the crisis financial results were notreflected as objectively as when outcomes were positive.