The letter from the CEO or Chairman may be the most turned-to section in an annual report or proxy statement. Yet, many companies seem to be missing an opportunity to make a meaningful connection with their readers.
Our annual benchmark study of the Fortune 250 proxy statements shows that 69% featured a letter from the CEO or Chairman. Of those that included such a letter, however, only 43% contained information relevant to the company. The rest typically focused on voting information and a brief “thank you for being a shareholder.”
The prominence and authority of the CEO/Chairman’s message suggests a missed opportunity. It is a communication that provides the first impression to the reader of who the company is and what it has to say. It is a platform available for presenting the company’s strategy, values and vision and for setting a course for the future that can be followed by all of its stakeholders.
Between you and me
Making every word count will help ensure that the letter will be read in its entirety and that it serves as a keystone for the full document. By emphasizing a few key points, the letter underlines what is most important to your company’s success and sets the tone for the rest of the report.
A key objective: inspiring trust. Your leader should speak to the reader in a way that is both direct and transparent, as if in a one-on-one conversation. Be sincere. Be realistic. Address difficult subjects. Combine modesty about what can be improved with confidence in the ability of your teams and partners to enable your company to achieve its goals. The message should not be overly long. A longer message does not generate more trust. Being brief and to the point will help to get the message across with the most clarity and impact and with the greatest likelihood of being retained.
Pay attention to form
The CEO/Chairman’s message also needs to be appealing, attracting the reader’s interest with words that resonate. A clear message facilitates understanding. Short sentences, with few adverbs and adjectives, no jargon, and the use of active and positive phrasing are essential ingredients for producing text that is fluid and a pleasure to read.
Consider different possible structures. A question and answer format can create a feeling of proximity. If written in the first- or third-person, informative subtitles and call-outs that highlight important points can help your reader to easily navigate and understand your message. Whatever your approach, make the most of the opportunity. Your public awaits you.