This is an interesting question because the definition of “transparent” in the context of corporate communications to investors can indeed be a little complex. Is “engaging” part of that definition? Probably if a company wants an investor to act a certain way (either buy more shares or at least maintain their equity position in a company; or vote a certain way for a shareholders meeting).
I have to admit that I don’t recall any training for disclosure lawyers to make their content engaging. But this article – “What Holds Attention? Linguistic Drivers of Engagement” – makes it clear what marketing people have known for a long time. After an experiment with 600,000 reading sessions drawing from over 35,000 pieces of content, they found that what works best for readers is processing ease (e.g., concrete or familiar words) and emotion.
“Processing ease” is all about plain language and making it easy for people to understand what you’re saying. To be honest, I’m far from being a brilliant writer – but I’ve found that people generally like what I write because I keep it fairly straightforward. As disclosure drafters, I think that approach keeps investors happy.
This is where proxy design can play a role too. Using charts, graphics and other elements, companies can more easily tell a story rather than multiple paragraphs of straight text.
But when it comes to writing with emotion, that’s when my legal antenna stands on its hairs. Too much emotion in a disclosure document that also serves a compliance function seems to invite room for litigators to pounce if one goes too far. Of course, it depends on the circumstances – that’s why you see “fight” letters in a proxy context go quite a bit beyond what otherwise is disclosed compared to a relatively staid Form 10-K…
