Does spending years in military platoons and squadrons shape how you take command in the corporate boardroom? There are numerous examples around the world of organisational leaders who have spent time in the military. The founders or co-founders of FedEx, Walmart and Nike – Fred Smith, Sam Walton and Phil Knight, respectively – are just three examples of individuals who served in the armed forces and went on to establish massive global corporations. There have been many studies showing the influence of corporate leaders with military backgrounds on their organisations’ financial outcomes. But we wanted to look at how this experience shapes communication styles within these corporations. Military-experienced executives possess unique characteristics, such as resilience, strategic thinking, and hierarchical leadership, which can significantly impact communication styles. Nowhere can this be better seen than in narrative disclosures that constitute more than 70% of annual reports. It is here that companies choose how to frame strategic direction, organisational identity, and leadership intent. Tone is a crucial element, and it is shaped by chairs and CEOs. This disclosure tone refers to the sentiment and psychological qualities embedded in the message. It is an ‘atmosphere’ influenced by corporate leadership conveying their attitude and sentiment. While content often follows strict regulations, tone is voluntary, granting executives the freedom to align narratives with strategic goals. This gives disclosure tone a powerful position to shape perceptions, influence decision-making, and drive stakeholder behaviour. It also reflects the imprint of leadership styles and experience. WATCH YOUR TONE Positive tone embodies optimism, encouragement, and confidence. It fosters trust and engagement. Negative tone encompasses pessimism, scepticism, and criticism. It introduces doubt and can weaken stakeholder confidence. A positive tone engenders trust and stakeholder participation, showing confidence in the organisation’s vision and capabilities. A negative tone can evoke disengagement from those same stakeholders, raising concerns over credibility or uncertainty. Disclosure tone is, therefore, a potent instrument. For employees, a positive tone fosters a supportive work environment; for investors it is a sign of stability and growth potential; for the government and strategic partners, they can see alignment with shared objectives, as well as credibility and reliability. How then (if at all), does this tone vary in corporate reporting for leaders with military experience compared to those without? MILITARY MANNERS Military experience imprints a distinct set of values, skills, and traits. Teamwork, resilience, and a strong sense of purpose are common. They endure over time. In military environments, positive communications encourage collective effort. When military-experienced leaders move into corporate executive roles, these values shape strategic communications, particularly in narrative disclosures. Our work looked specifically at China, where the 1985 troop reduction led to a wave of military personnel transitioning to the civilian sector. China is a unique context. The military holds substantial cultural significance, and political ideologies, cultural nuances, and state regulations intricately shape the corporate leadership landscape, and thus reporting. We looked at reports from almost 30,000 Chinese firms listed on the Shanghai and Shenzhen Stock Exchanges from 2010 to 2022. Our 48 |
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