CEO postings can be hits or headaches
Should Whole Foods unplug John Mackey’s computer?
Many corporations have discovered that putting their executives in front of a keyboard can generate positive buzz for the company. But the Whole Foods Market Inc. CEO’s pseudonymous Internet message board postings revealed this week -- like off-the-cuff entries by other corporate executives on their blogs -- can become a public relations headache, experts say, and possibly trigger litigation.
Although executives generally have far more latitude than their employees to ruminate about the workings of their company and those of their competitors -- or to riff on their favorite books and restaurants -- there are limits to what executives can and should say online.
Many companies have clamped down in recent years on blogging by workers, even firing disgruntled employees who have broadcast negative comments or revealed proprietary information.
At the same time, a growing number of company chiefs have stepped onto their own virtual soapboxes, using blogs to build connections with employees, partners, shareholders and customers.
Their electronic megaphones let the public “pull up the curtain a bit on corporate operations,” observed Debbie Weil, who wrote “The Corporate Blogging Book.” The postings humanize the CEO and tell readers how he or she thinks. “You’re running a big public corporation; people want to know,” Weil said.
But disparaging comments from the boss also “carry the imprimatur of the business itself,” said Rich Paul, a San Diego attorney who represents employers. If those comments defame a company or a product, “then the enterprise itself might have liability,” he said. If those postings contain insider information, they might run afoul of Securities and Exchange Commission rules, Paul added.
Whole Foods’ Mackey, who also blogs on the company’s site under his real name, posted messages under a false identity on Yahoo Finance stock forums for eight years ending in August. Many of the messages he sent as “Rahodeb” were critical of Wild Oats Markets Inc., which Whole Foods is trying to acquire.
In other postings, Rahodeb -- the handle is an anagram of Deborah, his wife’s name -- trumpeted Whole Foods’ stock gains and praised Mackey. “While I’m not a ‘Mackey groupie,’ I do admire what the man has accomplished,” he wrote in 2000.
The postings came to light in documents filed by Whole Foods on Tuesday with the Federal Trade Commission, which is seeking to block the Wild Oats acquisition.
In a statement, Whole Foods called the messages “the personal postings of Mr. Mackey and not those of the company,” and said Mackey used an alias “to avoid having his comments associated with the company and to avoid others placing too much emphasis on his remarks.”
The statement added: “There are no company policies regarding posting on public bulletin boards and no laws were violated.”
Weil called Mackey’s pseudonymous postings “unethical,” saying she couldn’t think of another CEO who had engaged in similar behavior.
“Common sense and good judgment rule so much of what you do on a blog,” she said, adding, “your reputation online is indelible. There’s a trail and people can find it.”
Mackey, a vegan and college dropout, worked at a natural foods store before helping to open the first Whole Foods store in Austin, Texas, in 1980. Now the leading retailer of natural and organic foods, the company has 196 stores and racked up sales of $5.6 billion last year.
Mackey’s blog, www.wholefoods.com/blogs/jm/, is livelier than many. In recent postings, he has tussled with author Michael Pollan, who has been critical of the chain’s business practices. Mackey has also blasted the FTC for its opposition to the Wild Oats deal, accusing the agency of “bullying tactics.”
A Whole Foods spokesman said Thursday that Mackey would be posting again soon to his blog.
Many CEO blogs read like they’ve been scrubbed of all life by publicists and lawyers. But sometimes companies suffer for being too quick to post.
That’s what happened at Google Inc. this month. An advertising saleswoman at the Web giant wrote a posting on a Google healthcare-related blog that criticized the new Michael Moore film “Sicko,” suggesting that healthcare companies could buy Google ads to answer the movie’s complaints.
After an outcry, Google apologized on its main corporate blog, saying that the employee’s thoughts about the film did not reflect Google’s official position.
“We blew it,” Google wrote.
Bill Marriott is one of the more recent entrants to the blogosphere. The 75-year-old chief executive of Marriott International Inc. launched his “Marriott on the Move” blog in January, musing recently on his work 40 years ago as a Mormon bishop as well as the hotel chain’s efforts to conserve energy and recycle.
Sun Microsystems Inc. Chief Executive Jonathan Schwartz was one of the first CEOs of a Fortune 500 company to start blogging, and about 3,500 of his employees now have their own blogs. He credits the improved communication for helping to revive the Santa Clara, Calif.-based computer maker and attracting customers, especially among small businesses.
Schwartz uses his “Jonathan’s blog” to muse about life as a CEO, discuss new products and even challenge the federal government to allow companies to post financial results online. When he learned of a potential customer’s frustration in reaching someone at Sun, he used his blog to hammer home how the company needed to become more approachable.
At a technology conference in San Francisco on Thursday, Schwartz said his blog attracted 60,000 readers on a good day. He said the only time his public relations team and corporate counsel reviewed his writing before he posted it was when the company was about to report quarterly earnings.
Generally, Schwartz writes and posts, letting the chips fall where they may.
“Blogging is just communication,” he said. “I don’t check with my general counsel before sending out e-mail.”