Abstract
The purpose of this dissertation was to critically analyse the use of CEO letters as a tool for strategic stakeholder communication with the intention of attaining legitimacy, in order to contribute to sustainable financial performance in the long term. There has been no research of this kind in a South African context before. This dissertation contributes to growing legitimacy research and existing legitimacy theory analysis. The researcher adopted an interpretivist research paradigm to analyse CEO letters in annual reports over a 41-year period. The study focused on identifying themes in CEO disclosures and connecting each to relevant, contextual legitimacy. Using the Discursive Action Model, it was found that Barloworld had participated in and benefited from legitimation through its CEO letters and that had contributed to its legitimacy growth. Over time, the group had earned cognitive legitimacy, expressed as familiarity to the conglomerate and its operations. Barloworld had, furthermore, developed a legitimacy framework which it actively pursued and maintained. This, alongside its most fundamental legitimacy, i.e., pragmatic legitimacy, was crucial for its ability to remain a sustainable, profitable going concern. The CEO letters, as strategic communication tool for top management, were utilised as a legitimation tool that indirectly contributed to Barloworld’s financial viability as a JSE-listed South African company. Finally, this dissertation’s framework, methodology and results may be applied to future research into the CEO letters of other JSE-listed South African companies and how their reporting practice(s) have contributed to their legitimacy. Legitimacy theory application as a strategy, if applied intentionally, may trailblaze the future of financial reporting and performance.
Key words
Chief Executive Officer (CEO) letters; Legitimacy; Financial performance; Discourse analysis; Discursive Action Model; Corporate social responsibility; Earnings variation; Stakeholder communication; Normative legitimacy; Pragmatic legitimacy; Cognitive legitimacy; Barloworld; Accountability; Action; Mergers; Acquisitions; Disposals.