The Power and Peril of CEO Promises

CEOs often strive to cheer up investor and stakeholder mood, promising great things are coming. But at times of uncertainty, CEOs strategically tweak their message: promises are still there, but they lack details and offer vague timelines.

“They employ strategic ambiguity,” said Bill Mayew of Duke University’s Fuqua School of Business, “because once you make a promise, you’re kind of locked into that course.”

Professor Mayew has long examined the language of earnings calls. In newly published research with Majid Majzoubi of York University and Alex Murray of the University of Oregon, the researchers set out to examine a subset of forward-looking statements: real promises that shape expectations and constrain future decisions.

In the paper Shaping expectations, losing flexibility: A study of CEO promises as strategic communication tools, published in the Strategic Management Journal, Mayew and co-authors studied the language of a decade of earnings calls by S&P 1500 companies.

They found that CEOs use promises when they need to prove their legitimacy. But when they face uncertainty, their language becomes vague to preserve strategic flexibility and avoid measurable consequences that come with overpromising and underdelivering. 

A new way to see what CEOs say

For years, researchers could track what CEOs said in earnings calls, but the focus was largely on the accounting numbers and related general linguistic sentiment, Mayew said. The conversation around strategy, vision, and long run commitments remained difficult to quantify.

“Dictionary word counts used to be the method to execute linguistic analysis, but dictionaries containing a possible list of promises a CEO might make were not available. We needed large language models (LLMs) to capture what counts as a promise,” Mayew said. 

The team focused on statements starting with phrases like “we will launch,” “we will achieve,” preceding the promise topic. They then identified when the promise was made, its horizon, and what happened afterwards.

The credibility playbook

A CEO promise, the researchers explain, is not just any forward-looking statement. It is a public, future-oriented commitment to deliver a favorable, firm-specific outcome, phrased with enough certainty that failing to deliver would damage the company’s credibility. 

The researchers analyzed over 69,000 earnings-call transcripts from S&P 1500 firms between 2010–2022.

They found that CEOs make more promises when they need credibility. Early in their tenure, when they lack a track record, CEOs rely more heavily on forward-looking commitments to signal direction and confidence.

“You really got to promise something out of the box to set the vision,” Mayew said of new CEOs.

The same dynamic appears after disappointing results. When firms miss earnings expectations, CEOs increase their use of promises—an attempt to restore confidence and reshape expectations about the future.

Even structural biases show up in the data. Female CEOs, who often face greater scrutiny, tend to make more promises, using them to establish credibility and counter skepticism.

The trade-off leaders can’t avoid

But promises come with a cost: they help build confidence but reduce flexibility.

“Once you make a promise, you’ve got to stay the course,” Mayew said.

In the short term, promises can energize investors, align employees, and support bold strategies. Over time, they can lock firms into paths that may no longer make sense.

This is especially visible in long-term commitments. The researchers found that the mean time horizon for a CEO promise is about 11.5 months—for example, “by the end of 2025, we will have more than 100 (...) centers.” They also found that some topics prompt much longer commitments, such as sustainability (33.7 months), Diversity, Equity, and Inclusion (28.7 months), and Clean and Renewable Energy Transition: 20.5 months.

Long horizons for some types of promises were expected, Mayew said.  Sustainability promises, specifically, often stretch decades into the future not because companies want to delay accountability, but because the underlying problems require long horizons.

“Issues that are intrinsically long-term require promises that match the time horizon to communicate what the CEO expects to deliver,” Mayew noted.

When uncertainty reshapes the message

Uncertainty also impacts how CEOs make promises. In unstable environments, they pull back and issue fewer promises overall, the researchers found.

But they do not stop communicating. Instead, they change the structure of their promises, using longer timelines and less precise language.

For example, during COVID-19, the average time horizon for promises with explicit timelines increased significantly, giving companies a larger window to reallocate resources or pivot strategy if external conditions shifted.

CEOs also resort to using "low-specificity" promises, using abstract language rather than measurable metrics—such as “We're going to be very aggressive in growing our mobile broadband franchise.” This vaguer language creates a “zone of acceptable fulfillment,” the researchers explain.

We can see this logic in today’s business environment. Companies may express strong confidence about investing in AI or new technologies, while remaining deliberately vague about when returns will materialize.

“CEOs will give their near-term data center investment plans in detail but aren’t going to promise you what the payout is going to be or when,” Mayew said, describing how executives navigate that tension.

The result is a subtle shift in tone: the promise remains, but the commitment becomes harder to pin down.

When promises come due

What happens when those promises are not kept? The research finds that they do carry consequences. Failing to deliver increases the likelihood of CEO dismissal.

Specifically, they found that for each additional broken promise—delayed or not delivered—the odds of involuntary CEO dismissal increase by approximately 22%. 

That risk is precisely what gives promises their power.

“If you don’t get hurt by it later, then how can it be credible in the beginning?” Mayew said.

If promises can raise market expectations and firm valuation, they also create benchmarks against which the company—and the CEO—will be judged.

Which raises broader questions company leaders should ask themselves: in a world where every commitment can be tracked and revisited, it’s worth weighing which promises are worth making—and how they should be delivered. 

“How can CEOs maximize delivery, so people believe faster? What makes a promise credible? Does a young CEO have to give a more emphatic delivery to make people believe it? And what vocal traits make the promise convincing?” Mayew said.