Death to Rahodeb
We have a uniquely minority viewpoint in regards to John Mackey’s investor chat room fun. When company is raked over the coals for things like Mackey’s internet interludes, while others are routinely applauded for massive layoffs, perhaps the business media has been duped by too many fancy cocktail parties or lunches to see the forest for the trees.
In a sad but overdue move, Whole Foods Market (Nasdaq: WFMI) has updated its Code of Conduct to ban executives from participating in online message boards. The code, updated over the weekend, tacked on the following provision:
To avoid the actual and perceived improper use of Company information, and to avoid any impression that statements are being made on behalf of the Company, unless approved by the Nominating and Governance Committee, no member of Company Leadership (as defined below) may make any posting to any non-Company-sponsored internet chat room, message board, web log (blog), or similar forum, concerning any matter involving the Company, its competitors or vendors, either under their name, anonymously, under a screen name, or communicating through another person. Violation of this policy will be grounds for dismissal. For purposes of this paragraph, “Company Leadership” includes each Company director, Executive Team member, Global Vice President, Regional President and Regional Vice President.
If the passage seems peculiar, you probably slept through the whole Rahodeb fiasco that blew up over the summer. CEO John Mackey had spent the past few years posting on the Yahoo! (Nasdaq: YHOO) stock boards under the pseudonym Rahodeb.
His hundreds of postings never revealed company secrets. But disguised behind that screen name, he had no problem confronting those who didn’t agree with his upbeat view on the company.
One could argue that this provision isn’t necessary, but it’s common sense. It’s like asking Pete Rose not to bet on baseball. However, it is disheartening to see the code extend to company executives who decide to post under their own names. I realize such posts open a can of selective-disclosure worms; the subject admittedly has more gray areas than a 70-year-old’s scalp. However, I’ve always found it refreshing to see Overstock.com’s (Nasdaq: OSTK) Patrick Byrne post on public message boards, as he has at Fool.com in the past.
What’s more is that NBN imagines Mackey’s motivation was more out of curiosity than greed. Unlike most CEO’s Mackey is money mad. He’s far more evolved and far more eccentric, especially when compared to other far less successful CEOs.