CEO postings

Abstract

For approximately eight years, Whole Foods Market, Inc. [Whole Foods] CEO John Mackey posted messages to Yahoo! Financial’s online message board for Whole Foods. Rather than using his real name, Mr. Mackey like many posters to chat rooms, created an online alter ego and posted his comments under a pseudonym. As "Rahodeb" Mr. Mackey promoted his Whole Foods chain, boasted about personal stock gains in Whole Foods stock, company plans and performance records, as well he criticized competitors. His actions raise profoundly important corporate governance questions and potentially implicate a range of legal challenges including securities, defamation, privacy, trade libel, copyright and trade secret laws. Perhaps tempted by the perception (or, is it more an illusion) of anonymity on the internet where posters perceive they are at once protected and liberated from further inquiry, Mr. Mackey’s actions raise novel questions especially in the area of securities regulation because of his position as an executive engaged in public communications about a publicly traded company. While there is extensive literature addressing issues raised by anonymous communications by employees, this present article focuses on anonymous communications by executives, thus triggering other legal and regulatory concerns. The specific legal issues are part of a broader set of concerns as executives’ messages are now communicated in an era with unlimited distribution potential. This reach and scope of executive communications impact company security, reputation and compliance. The author sets out recommendations on best practices for managing officer communications, clearly an issue of growing concern due to the increased modes and opportunities for communication.