Looking for evidence that writing quality matters?

To Be Clear, SEC Reviewers Want Filings in Plain English, Period” from the Wall Street Journal will help you make your case. Let me highlight a few of their examples of SEC (Securities and Exchange Commission) responses to the filing documents companies have submitted for review.

In case these documents are unfamiliar to you, here’s how Wikipedia describes them:

An SEC filing is a financial statement or other formal document submitted to the U.S. Securities and Exchange Commission (SEC). Public companies, certain insiders, and broker-dealers are required to make regular SEC filings. Investors and financial professionals rely on these filings for information about companies they are evaluating for investment purposes. Many, but not all SEC filings are available online through the SEC’s EDGAR database.

Use the Wikipedia link to see the list of specific documents (and forms) companies deliver to the SEC for review.

The WSJ piece refers to content in specific SEC responses. Illustrative reading for anyone who wonders whether writing quality matters in the workplace, as well as why white collar workers write.  Here’s one example.

This one mentions problems with the quality of format (typesize) and informative prose development (definitions, descriptions, etc.).  Other letters mention quality problems with style (jargon) and punctuation (commas). Sadly, WSJ undermined the value of their information by publishing a follow-up piece describing the low quality of filing documents by testing them with readability formulas.

If the topic of financial communication interests you, there have been a couple of interesting-looking conferences in the past two years in the UK: see Corporate Financial Information Environment.  You can also keep a look out for an upcoming paper by Ron Dulek and me in which we analyze strategic ambiguity in several cases of corporate finance (see below).  Now back to the required revisions for that paper . . .

Related Research

Arnold et al. (2010).The effects of ambiguous information on initial and subsequent IPO return. Financial Management, Winter, pp. 1497-1519.

Brochet et al. (2012). Causes and consequences of linguistic complexity in non-U.S. firm conference calls. Harvard Business School Research Paper.

Dulek & Campbell (in press). On the dark side of strategic communication. Journal of Business Communication.

Eisenberg (1984). Ambiguity as strategy in organizational communication. Communication Monographs, 51(3), pp. 227-242.

Gao et al. (2008). Signaling corporate strategy in IPO communication: A study of biotechnology IPOs on the NASDAQ. Journal of Business Communication, 45(10, pp. 3-30.

Garrison et al. (2012). Designing evidence-based disclosures: A case study of financial privacy notices. The Journal of Consumer Affairs, Summer, pp. 204-234.

Higgins & Bannister (1992). How corporate communication of strategy affects share price. Long Range Planning, 25(3), 27-35.

McLaren-Hankin (2008).’We expect to report on significant progress in our product pipeline in the coming year’: Hedging forward-looking statements in corporate press releases. Discourse Studies, 10(5), 635-654.

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