Abstract: For approximately eight years, Whole Foods Market, Inc. [Whole Foods] CEO John Mackey posted messages to Yahoo! Financial’s online message board devoted to discussion of Whole Foods. Rather than using his real name, Mr. Mackey like many posters to chat room, 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, and criticized Whole Foods’ competitor Wild Oats Markets [Wild Oats].His actions raise profoundly important corporate governance questions and potentially implicate a range of legal challenges including: securities, employment, 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 his publicly traded company. While there is extensive literature addressing issues raised by anonymous employee bloggers and posters, this present case involves anonymous communications made by an executive, thus triggering other legal and regulatory concerns. As courts, agencies, and the Whole Foods Board of Directors sort out the issues involved here, their relation to a broader set of concerns is notable: managing the message in an era of unlimited reach and scope, because executive communications impact the company’s security, reputation and compliance. Recommendations follow on best practices for managing officer and employee blogging, an issue of growing concern due to the increased modes and opportunities for communication.
http://ssrn.com/abstract=1118602
CEO Online Postings: Leveraging the Internet’s Communications Potential While Managing the Message to Maintain Corporate Governance Interests in Information Security, Reputation and Compliance by Margo E K Reder
Abstract: For approximately eight years, Whole Foods Market, Inc. [Whole Foods] CEO John Mackey posted messages to Yahoo! Financial’s online message board devoted to discussion of Whole Foods. Rather than using his real name, Mr. Mackey like many posters to chat room, 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, and criticized Whole Foods’ competitor Wild Oats Markets [Wild Oats].