Meet Rahodeb -- that's the screen name Whole Foods' founder and CEO John Mackey used to post comments on the Whole Foods (NASDAQ: WFMI) message board on Yahoo -- for eight years!
This story is just breaking but it will be huge -- a CEO of an otherwise well-regarded company (except by unions), who used online communications tools to tout his company's stock, bash competitors, and so on.
Wow.
Rahodeb, for those of you into words (like me), is a jumble of his wife's name, Deborah -- RAH O DEB, the three syllables of her name in reverse order. Very clever (not).
From a PR perspective, where do you start analyzing a story like this?
First off, let me offer my services to Whole Foods (always get the pitch in early). They're going to need A LOT of crisis communications help. Seriously. Call me. ;)
On to the matter at hand: there is a PR crisis, an investor/management crisis, and the question of online ethics and communications.
Frankly, the PR and investor/management crises will play out fairly routinely: mea culpas, calls for resignations or reductions of power, management changes, maybe even a Congressional hearing or two.
But the question of online ethics jumps out: it's obviously a major gaffe to have done this, but with everyone else posting anonymously, why couldn't he? Online, where it seems almost everyone is being someone else at least part of the time, what are the ethical standards to which we ought to adhere?
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Update:
Another important wrinkle of this story is that Whole Foods is in the process of trying to acquire Wild Oats, the competitor Mackey was bashing on Yahoo Finance. So this revelation has the potential to seriously damage that proposed merger.
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ReplyDeleteCEOs of publicly traded companies who are trying to influence the stock price of their competitors and acquisition targets should make their comments on the record and for attribution. That's the ethical standard to which they should adhere. If Mr. Mackey did not know any better, where were his PR and IR counsel? Where they aware of his actions and condone them?
ReplyDeleteThanks Kristine. Of course you are right. CEOs have a fiduciary obligation as officers of the company to make honest and truthful public representations about their company. Thanks for making the point.
ReplyDeleteIn asking the rhetorical question above, I was seeking to spur thought and discussion about ethics in a world in which we no longer know for sure who we are dealing with. For instance, while it would have again been a mistake to do this, would it have violated his fiduciary duties to post negative comments under his screen name on the Wild Oats forum? What if he restricted himself to speaking only about the customer experience, not financial matters. Does his obligation extend there?
Mackey's behavior was terribly unethical; the FTC and others will decide if it was criminal. (You also have to be amazed at the brazen ego this guy must have to trumpet his best-in-the-universe commitment to transparency on his own blog until it was revealed that for seven years he cowered behind an alias while talking up his company's stock and trashing a competitor's stock, that would soon become his company's target in a hostile takeover.)
ReplyDeleteYet, the media and much of the blogosphere is letting him off remarkably easy. Why? Because the media archetype is for evil big corporate CEOs to do the bad things, not the CEO of a "good company" like Whole Foods. Imagine for a minute that the CEO of Exxon or Wal-Mart had done what Mackey did -- get ready for some serious outrage! For more, see:
http://jon8332.typepad.com/force_for_good/2007/07/whole-foods-ceo.html