Document Type

Journal Article


Faculty of Business and Law


School of Accounting, Finance and Economics / Finance, Economics, Markets and Accounting Research Centre




This is an Author's Accepted Manuscript of: Smith, G. M., Gerrans, P. A., & Whale, J. (2012). Superannuation Fund Communications in Good and Bad Times. International Research Journal of Applied Finance, 3(6), 731-755. Available here


We examine the content and presentation of the first statement to members appearing in a Superannuation Fund’s annual report (typically made by the Chairperson or the CEO). We reflect on the words and themes employed, and the clarity and readability of communication. Our focus is on the respective differences between statements made in the year prior to the global financial crisis (GFC) and those made during the GFC. A content analysis of the CEO statement was conducted for 81 annual reports in each of the two years - respectively ‘good news’ and ‘bad news’ years. The readability of statements (as measured by the FLESCH reading ease index) is surprisingly consistent. Readability scores for ‘bad news’ statements do not differ significantly from those for ‘good news’. Although the themes appearing in the statements remain relatively constant, their ordering and the emphasis accorded them differs greatly. ‘Good news’ statements focus on fund investment performance, while ‘bad news’ statements are oriented more to ‘market performance’. This is consistent with the literature which suggests that poor performance will be attributed to external factors. Compared with company annual reports, the superannuation fund statements tend to adopt a more ‘folksy’ style, reflecting both the different audience and purpose of the report. If message consistency is an attribute of successful communication, then there is room for improvement in the writing of the statements. The role of the market performance and its impact on fund investment performance needs highlighting in good and bad return periods. Similarly the emphasis on investment time horizons, particularly descriptions of superannuation as a long-term investment, also needs reinforcing in good and bad times. This recommendation is consistent with ASIC’s move in 2008 to ensure funds include medium to longer term performance data in annual reports and/or member periodic statements. The paper contributes to the literature on readability in corporate communications by examining the annual reports of Superannuation Funds experiencing a ‘bad news’ year due to the GFC, and comparing them with the previous years’ ‘good news’ reports.

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