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Meta Platforms Inc.'s Mark Zuckerberg broke three years of silence on X to announce the launch of a new AI model. Nvidia Corp.'s Jensen Huang signed up for the platform to share an open letter in support of an open artificial intelligence ecosystem. LVMH's Bernard Arnault also got himself an account to post an open letter - in his case to rebut a Le Monde investigation into succession at the luxury empire.
The CEOs have been posting. They've also been podcasting, blogging and vlogging, conference headlining and LinkedIn influencing.
The big bosses' side hustle as content creators is one reason former Goldman Sachs Group Inc. President Gary Cohn, now the vice chairman of International Business Machines Corp., thinks corporate America has outgrown quarterly reporting. "I'm sitting here with a TV in front of me with four business channels on it; CEOs are talking every day," he recently told Semafor. When quarterly reporting became mandatory in 1970, he argued, earnings season was "the only time shareholders could hear anything about the company."
These days, though, you can pop over to Microsoft Corp. CEO Satya Nadella's blog if you want his thoughts on AI, or tune into the In Good Company podcast to hear Pfizer Inc. CEO Albert Bourla rhapsodize on leading the company through Covid.
But all this CEO chatter is not the same thing as disclosure, and it's a mistake to confuse the two. Rather, it's selective storytelling, designed to create a curated narrative about a company or the person running it. As my Bloomberg Opinion colleague Andrea Felsted noted last week, Arnault's public letter is engaging and witty, but he does not actually address the succession question that has become a flashpoint for LVMH investors.
These are types of eschewals that mandatory reporting is meant to address, requiring companies disclose what they might otherwise prefer not to reveal. It's standardized, verified and comparable. Both kinds of communication matter, but one does not replace the other.
Investors seem to recognize the distinction. Research published in 2020 in the Journal of Accounting and Economics found that the market's reaction to earnings announcements has increased significantly since 2001, largely because companies have crammed more information into their releases. If quarterly reports had truly become redundant alongside the growth in CEO communication, then presumably those increasingly sharp stock price jumps wouldn't be happening, Stanford Graduate School of Business professor Ed deHaan told me.
DeHaan pointed me toward Cohn's own company, IBM, whose recent preliminary profit warning wiped 25% off its share price in a single session - its worst one-day drop on record. "If the underlying premise is that the information would reach the market regardless, that doesn't seem to have been the case," he said.
IBM made what was arguably a voluntary disclosure since it preannounced the results. But deHaan told me that Cohn's comments to Semafor, indicating he would have preferred not to announce anything until after the company's contracts went through, suggest the warning might not have been issued if the company wasn't required to report earnings a week later.
There's plenty of evidence that companies stop reporting voluntary information when it no longer paints the intended picture. We have a recent example in Netflix Inc., which two years ago said it would no longer release subscriber data quarterly. Then last month the company said it would report viewership details annually rather than twice year. Forrester research director Mike Proulx neatly summed up how investors should think about those moves:
Netflix is running a familiar play when a metric gets uncomfortable: it shifts the spotlight. When subscriber growth became a less reliable story, Netflix stopped reporting quarterly membership numbers. Now, as engagement faces more scrutiny, the company is reducing the frequency of that report. Netflix says engagement is healthy. If that's true, investors should want more visibility into it, not less. Pulling back engagement reporting at the exact moment engagement is in the spotlight gives off a strong 'nothing to see here' vibe.
Distinguishing between selective narrative and required disclosure has become even more crucial as the audience for CEOs has shifted. Increasingly, companies aren't just speaking to investors and customers but instead to the AI systems that influence what we all see and think. Paul Cohen, CEO of public relations firm Attention Comms, told me the rise of large language models has made corporate blogs strategically important again. "No person really cares about corporate blogs," he said. "But the bots really care about corporate blogs." LLMs are learning from all of this published information, which then becomes embedded in what AI uses to answer humans' questions and shape what they believe.
There's a strange paradox to all this. CEOs are trying harder than ever to appear authentic and human. But increasingly, they're doing it for AI rather than people. That may be the future of corporate communications. But it has raised, not lowered the stakes, for the standardized disclosures - the one space that is still relatively free of noise, narrative and CEO spin.
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Beth Kowitt is a Bloomberg Opinion columnist covering corporate America. She was previously a senior writer and editor at Fortune Magazine. Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. Previously, she was a reporter for the Financial Times.
Previously:
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• The great unbundling is making everyone feel poorer
• Dreaming of a cushy job as a CEO? Good luck!
• Inside Walmart's masterclass in reputation rehab
• Campbell's vulgar leak required more than defending its soup
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• What if bureaucracy is . . . good?
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• Get ready bosses --- today's protesters are tomorrow's workers
• AI may not only take your job, but fire you first