The Power of Words: How CEO Speech Length and Frequency Shape ESG Transparency

This study examines the impact of CEO communication behaviors, specifically speech length (SPEECH_LEN) and speech frequency (SPEECH_FREQ), on ESG (Environmental, social, and governance) performance, focusing on governance and environmental dimensions. Using a sample of 1,687 publicly listed firms across 10 European countries from 2014 to 2022, the findings show that longer CEO speeches are positively associated with better governance and environmental performance. CEOs who deliver detailed and lengthy speeches demonstrate greater sociability and friendliness, thereby fostering trust and transparency within the organization. This communication enables CEOs to articulate governance strategies, address challenges, and engage with stakeholders on social and environmental issues. However, speech frequency shows a negative relationship with governance and environmental performance, suggesting that over-communication can lead to stakeholder skepticism, especially when not backed by tangible actions. This effect is more pronounced in the full model (Model 3), where speech frequency is coupled with speech length. In this combined model, the impact of frequent speeches is less significant unless accompanied by depth and substance, reinforcing the importance of meaningful communication over repetition. These findings challenge the assumption that more communication inherently enhances corporate transparency, emphasizing that the quality of communication is equally important. The study highlights the need for CEOs to balance sociability and talkativeness with substantive commitments to ESG goals, as excessive speech without measurable outcomes can damage credibility and undermine corporate trust.