3 Secrets to a Great CEO Letter

With the fourth quarter in the books, corporate annual report season is now in full swing. Of course, the heart and soul of that report is the CEO letter to shareholders.

There’s a lot riding on this letter. It’s a once-a-year opportunity for a CEO to speak directly to key target audiences to share his or her insights on the achievements, performance and challenges of the previous year. It also offers a platform to lay out the strategic vision for the future, and how your organization aims to execute, grow, and make the most of new opportunities.

You don’t have to work at a public company—or even in the corporate world for that matter—to learn from a good CEO letter to shareholders. Many of the elements of a strong letter can be useful to leaders everywhere, whether they are running a non-profit, foundation, school, or government entity.

Here’s three keys to making a CEO letter sing:

Start with the end in mind: A good CEO letter can succeed—or fail—before a word is ever written. How? By not taking the time to think through what you are trying to achieve. More specifically, what do you want your audience to be thinking, feeling, and maybe even doing, after they have read the letter? Working backwards from there will keep you on track for what you're trying to accomplish. Thinking through the various ways you might leverage your annual report on an ongoing basis can help focus your thinking as well.

Find the right voice: Whether your CEO is partnering with a ghostwriter or crafting a first draft, make sure a tone is struck that authentically conveys who he or she really is. If the CEO has a folksy nature then let that shine through in the letter. On the other hand, if he or she is more button-down and straightforward, the writing should reflect that. It’s not only about tone, but also style. I worked with a CEO who was a natural and gifted storyteller so it made sense to weave some relevant personal anecdotes into his letter. Another CEO I worked with was a no-nonsense number cruncher so including a personal story would have seemed forced and disingenuous. Each of those CEOs had distinct approach and strengths that were effectively conveyed through the tone and style of letter.

Tell the story behind the numbers: There are plenty of financials and data that occupy page after page of an annual report. They certainly serve a valuable purpose. Yet your CEO doesn’t need to cram them all in the letter. A better approach is to turn to the old journalism maxim of 'show don’t tell.' Describe in concrete ways what some key numbers mean—and how they are making a difference. So if you’re a bank that experienced a 40% increase in commercial lending, focus on how that came to life in the form of a plant expansion that kept contractors hammering away for six months and 30 local people landing good-paying jobs.

Don’t sugar-coat: Authenticity and transparency. You might want to post those words somewhere you can readily see them. More than ever, they are the foundation to building strong connections and trust with your audience. Obviously, your core aim is to highlight your organization’s strengths, success and potential. And you absolutely should tell that story in the most effective way possible. Yet your credibility regarding your achievements is directly tied to your ability and willingness to acknowledge challenges—and, at times, admit mistakes. Take a problem-solver approach to addressing major challenges, and lay out your plan to deal with them moving forward. Your audience will recognize your candor and reward you for it.

A good CEO letter can build confidence and trust in your organization, position your CEO as a thought leader, and set the tone for a promising future. Make sure it’s not an opportunity lost.