Oracle Should Have Disclosed Hurd’s Illness Sooner
(Bloomberg Opinion) -- I understand why Oracle Corp. tried to keep the illness of Mark Hurd, one of its chief executive officers, private as long as possible. It was a humane personal decision, but it was the wrong corporate one.
The legal requirements are squishy about when a company must disclose a CEO’s ill health, and I don’t think that Oracle necessarily had an obligation to disclose Hurd’s condition. My default position, however, is that transparency is the best approach for a public company or a public institution. Candor is evidence that a company has a culture in which people do the right thing and that strong structures are in place to support good governance. Being upfront also avoids putting people in situations where they feel they need to lie to protect a colleague.
A good rule of thumb is if you have to fudge excuses for an executive or an elected official missing official duties, or if there is gossip spreading about why an executive is scaling back his responsibilities for more than a short time, it’s time to open up about what’s wrong. Bloomberg News reported on Wednesday that Hurd handed off oversight over most of Oracle’s marketing team late last year, and Oracle officials gave different explanations over the past year and a half for why Hurd skipped events or why his appearance seemed to change.
Given those circumstances, and the apparent rumblings about Hurd’s condition inside the company and among analysts, it should have been predictable that at some point the illness would either have to be made public or someone would make it public. Being upfront puts a company in control over when and how to disclose sensitive matters.
When Warren Buffett announced in 2012 that he had early-stage prostate cancer and Jamie Dimon, the JPMorgan Chase chairman and chief executive, did the same with a throat cancer diagnosis in 2014, the disclosures let them dictate the timing, form and message about their illness and how the company was handling it. The disclosures also squashed any rumors and diffused the inevitable second-guessing about when and whether the companies were obligated to make their executives’ health conditions public.
To be fair, Oracle didn’t pull an Apple, a company that repeatedly dodged and misdirected about the cancer diagnosis and liver transplant of its chief executive, Steve Jobs. Oracle and Hurd didn’t lie publicly, nor is Hurd the equivalent of Jobs. He’s a hired hand— a good one, to be sure — but not like Jobs, Buffett or Dimon, who are so closely tied to their companies’ identity and performance that a medical condition is unquestionably a material matter for shareholders.
You may read this and say that people should be able to keep health problems private, no matter who they are or the positions they hold. We all handle serious illnesses differently, and if I were in Hurd’s shoes, I’m not sure how I would deal with a health crisis. I certainly wouldn’t want my family to read headlines about it.
But one of the downsides of being a big company CEO or an elected official is the loss of some privacy and complete control over personal matters. No one should be forced to be an open book in all circumstances, but sometimes the good of the institution trumps the good of a single person. And in public companies or public institutions, transparency is a marker of stoutness. Once a company isn’t upfront about a difficult call like an executive’s illness, it plants a seed of doubt that it would be open about financial problems, troubles with key products or other important matters.
Google has tended to obfuscate about health issues experienced by Larry Page, the company’s co-founder and CEO of parent company Alphabet Inc. As with Alphabet, Oracle’s lack of candor is an example of a company built on a weak foundation — and a tendency toward obfuscation doesn’t stop at health matters.
Given the lack of transparency about Hurd, it is reasonable to wonder what would happen if Larry Ellison, Oracle’s founder and the person most closely identified with the company, had a serious illness. Could investors trust that Ellison and the board would make the right call about how to handle such a situation? Would Oracle have disclosed Hurd’s illness at all if its hand had not been forced by a news organization’s inquiries?
It goes without saying that I wish the best for Hurd and his family. I empathize with people at Oracle who wanted to protect Hurd. That’s the horrible thing about openness. It’s sometimes in the best interest of the institution, but it can be a painful thing to do.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Shira Ovide is a Bloomberg Opinion columnist covering technology. She previously was a reporter for the Wall Street Journal.
©2019 Bloomberg L.P.