Stakeholder communication in CEO letters

CEO letters in annual reports

The annual report is one of the most important and comprehensive instruments of corporate communication. On the one hand, the report must comply with numerous (and constantly increasing) disclosure obligations. On the other hand, the annual publication is intended to communicate the strategies, business models and values of companies to a broad audience.

The letter from the CEO is the most personal part of the annual report. There are no legal requirements regarding the content and form of the letter. However, it has two functions: firstly, the letter opens the report on the front pages and thus sets the tone of the publication - and ideally also arouses curiosity. Secondly, the letter has a representative function for the management of the company. In terms of content, the focus is usually on business development and strategy, but other topics, such as sustainability, are also mentioned.

But who is the CEO letter addressed to? Which target groups are addressed? 
This question is interesting because an answer allows conclusions to be drawn about the stakeholder prioritisation of corporate management.

Stakeholder communication

"Stakeholders" are understood to mean those who are influenced by or influence corporate actions: "A stakeholder in an organization is (by definition) any group or individual who can effect or is affected by the achievement of the organization's objectives.". (Freeman, 2010, p. 46) There are various approaches to differentiate and prioritise stakeholder groups - for example, on the basis of their power, legitimacy and urgency (Mitchell et al., 1997) or their willingness to cooperate and their conflict potential (Freeman, 2010; Savage et al., 1991). 11 relevant stakeholder groups can be derived from the literature:

Shareholders Clients
Management Employees
Group (subsidiaries) Participations
Partner (e.g. suppliers) Special Purpose Associations (e.g. trade unions)
Public & Society Politics & State (e.g. regulatory authorities)



The present study is based on a content analysis of the CEO letters in the annual reports of the DAX30 companies from 2017. The aim of the analysis was to find out which stakeholders are addressed in the letters and whether they are given different priorities. The first step was to determine the number of namings per stakeholder group. Subsequently, a ranking of the stakeholders was established for each report (most frequent nomination = rank 1). The mean values of the stakeholder groups were then calculated and a ranking across all letters was determined - this represents the prioritisation of the stakeholders across all letters.


First of all, it turns out that the annual reports of two companies did not contain a letter from the CEO. If one compares the absolute number of addresses of all stakeholder groups for the remaining reports, considerable differences can be observed: SAP (65 citations), Heidelberg Cement (63), and Bayer (62) most frequently address stakeholders in the CEO letter. Deutsche Lufthansa (17), Munich Re (17) and Continental (15) are the companies with the lowest number of responses in the CEO letter.

A glance at the ranking of the various stakeholders across all letters shows that clients are mentioned most frequently in the CEO letters. The majority of this is done when presenting the course of business ("Never before have so many passengers flown with the airlines of our Group"). Lufthansa). In second place are the company's employees: their performance is usually commended by the CEO ("These are excellent businesses that have been built up by our employees over many years"). Bayer).

This is followed in third place by the public and society ("We keep an eye on the needs of the rapidly growing world population.") BASF) and fourthly the shareholders, who are the only stakeholder group to be addressed directly in the vast majority of CEO letters ("What does this all mean for you, our shareholders?" Allianz).

Politics & government and special purpose associations are rarely mentioned in CEO letters. This shows, however, that this is strongly dependent on the company's situation: In RWE's CEO letter, politics is the most frequently mentioned stakeholder because of the energy turnaround.


The CEO letter is the part of the annual report in which CEOs present their views on (mis)successes and their vision for the company. Even if the letter is usually addressed to the shareholders, they are surprisingly addressed little. Among the more frequently addressed target groups, customers stand before employees and the general public. This shows that stakeholder management has established itself in the minds of the CEOs. The annual report has the potential to become an instrument of stakeholder communication. The frequency with which different stakeholders are approached allows a look into the considerations of the company management. Capital market participants may also be interested in how different stakeholder groups are prioritized by being addressed by a CEO. Finally, stakeholder prioritization always has strategic implications.


Further Literature

  • Freeman, R E. (2010). Strategic management: A stakeholder approach. Cambridge: Cambridge University Press.
  • Mitchell, R. K. et al. (1997). Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. In: The Academy of Management Review, 22 (4), S. 853-886.
  • Savage, G. et al. (1991). Diagnostic Typology of Organizational Stakeholders. In: The Executive, 5 (2), S. 61-75.