Discovery and Disclosure
The presidential race has brought a focus on the medical histories of the candidates to the national forefront. But what's the responsibility of a CHRO when questions arise about a CEO's health?
By Susan R. Meisinger
After presidential candidate Hillary Clinton was diagnosed with pneumonia early in September, her campaign released a doctor's letter stating that she was "healthy, and fit to serve as President." Shortly thereafter, Donald Trump's campaign released a similar letter from his doctor stating that "Mr. Trump is in excellent physical health."
Both doctors' letters gave additional details about the candidates' health history, with information on the medications each was taking as well as various lab-test results.
The release of medical records for presidential candidates has become a common practice, and since both of the major candidates this year are, well, old enough to qualify for Medicare (she's 68; he's 70), it seems reasonable to share health information before asking for voters' support. After all, a decision to cast a vote for a candidate may be impacted by whether or not you think a candidate can go the distance.
But what about a corporate CEO? What's a CEO's responsibility to share information about his or her health? And what's your responsibility as a CHRO if you become aware of a CEO's health-related issue?
The answer may be easy when a CEO's illness is sudden and dramatic -- such as when United Airlines CEO Oscar Munoz suffered a heart attack one month after taking the position last year, and then this year had a heart transplant before returning to work.
But what about the case of Steve Jobs of Apple? In October 2003, Jobs was diagnosed with pancreatic cancer, and although the board of directors was notified, no public announcement was made. Jobs told Apple employees in July 2004 that he'd had successful surgery for pancreatic cancer, and despite appearing much thinner, no further information was shared until January 2009, when Jobs explained in a letter that he was suffering from a "hormone imbalance." Jobs ultimately took a leave of absence and then resigned shortly before dying in 2011. During the entire time his health was failing, very little information was shared with the public.
Publicly traded companies are governed by the Securities and Exchange Commission, and it's pretty clear that companies have to disclose when a CEO is "unable to perform his or her responsibilities." But what about when the CEO is performing the job but may not be healthy?
SEC rules require disclosure of information that is "material" -- meaning information that an investor would need to make an informed decision on whether or not to buy, sell or hold shares of stock in a company. Without hard lines on what health conditions are or are not "material," this can be a judgment call. Not surprisingly, CEOs and boards are often biased against disclosure, for fear of an adverse market reaction to the news. Apple's stock certainly reacted whenever there was a disclosure regarding Jobs' health.
But in an increasingly transparent and Wikileaks world, where it seems that no secret can remain a secret, I think the trend and pressure will be on greater disclosure. Consider, for example, how market guru and Berkshire Hathaway CEO Warren Buffett immediately disclosed when he was diagnosed with prostate cancer in 2012. Similarly, JPMorgan Chase CEO Jamie Dimon immediately disclosed his diagnosis of throat cancer in 2014.
So what's the responsibility of a CHRO when questions arise about a CEO's health? What, for example, should a CHRO do if he or she begins to question the capacity of the CEO to effectively lead because of health-related issues?
Hopefully the CHRO has developed a relationship of trust and open communication with his or her CEO. After all, research has shown that to be successful, CHROs must establish a set of trusting relationships with the board, the CEO and other executives.
Based on such a relationship, the CEO is more likely to not resist sharing confidential medical information were the CHRO to probe about his or her health. This relationship will, in turn, enable the HR leader to help the CEO analyze and decide what does or doesn't need to be communicated to the board of directors, investors and/or the public.
But while the CHRO works for the CEO, the CHRO also -- and ultimately -- works for the board of directors and the corporation. If a CEO refuses to acknowledge or share information about a health condition that is compromising his or her ability to lead the organization, a CHRO must act. Using good judgement and discretion, the CHRO must take steps to inform the board.
Sound like you may be walking on thin ice? Doesn't this mean going around the CEO? Could the CEO still convince the board that there is no health issue, and then retaliate against a CHRO for going to the board?
Yup. But it's the CHRO's responsibility to give the board the information it needs to ultimately protect shareholders. And besides, that's why you're paid the big bucks.
Susan R. Meisinger, former president and CEO of the Society for Human Resource Management, is an author, speaker and consultant on human resource management. She is on the board of directors of the National Academy of Human Resources.