The pandemic seems to raise new challenges every day – or possibly every hour – in both our personal and work lives. However, at least one of the challenges is not so new; namely, if and when to disclose that a CEO or other senior officer is infected with coronavirus.
I have expressed my views on disclosure of a CEO illness a couple of times in the last few years (see here and here). Simply stated, I think a CEO’s serious or potentially serious illness should almost always be disclosed. In some cases, he or she is the alter ego of the company; the CEO’s name is practically a household word, and his or her name is synonymous with that of the company. However, even when that is not the case, the CEO is (or at least should be) the most important person in the company. Certainly, if you read proxy statement disclosures, the CEO’s compensation is frequently justified on the basis that his/her leadership is very important, if not critical, to the company’s future; why else would or should he/she make the really big bucks and have so many financial reasons to stay with the company?
Disclosure is arguably even more important – perhaps much more so – in a pandemic. Our companies are under incredible stress in all sorts of ways, and a CEO’s illness raises a number of serious concerns, including whether other members of the C-suite may have been infected, potentially further depleting the management ranks.
You don’t see many – if any – discussions concerning disclosure of a director’s illness, but in the current pandemic, companies would be wise to consider this as well, particularly if the director in question is part of board leadership, whether the independent chair or lead director or the chair of a committee.
Justice Brandeis may not have had a pandemic in mind when he said that sunshine (i.e., disclosure) is the best disinfectant. But his words nonetheless merit serious consideration in our current situation.