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.
Nobody likes it when executives deceive the public. Both Sony (NYSE:SNE) and Wal-Mart (NYSE:WMT) have been raked over the coals for creating fake blogs to endorse their products. Microsoft (NASDAQ:MSFT) made headlines when the company was accused of paying to edit its own Wikipedia entries. It makes you wonder what its CIO had to do to get canned this week!
In short, the public doesn't like it when companies color outside the predefined marketing lines. Even if it's for the sake of personal entertainment -- and one has to expect that even CEOs can't be on the job 24/7 -- some lines just can't be crossed. Thankfully, Mackey's written wit won't die with Rahodeb, thanks to the new code's specific ban on "non-Company" sites.
We can hope that this loophole will be enough to return Mackey to his corporate blog, which has been on hold since the Rahodeb mess escalated four months ago. Whether he's getting back to blogging, or smoothing things over with Whole Foods' shareholders, Mackey's voice deserves to be heard in an appropriate setting.
In the end, Mackey's antics didn't cost the company its acquisition of Wild Oats. Still, there's no shame in grabbing a shovel and tossing 6 feet of dirt atop our dearly departed Rahodeb.
