If a CEO gets dinged for driving under the influence, should a company have to disclose it? I went on CNBC’s "On the Money" Friday night arguing that in the case of US Airways’ (LCC) Doug Parker it wasn’t necessary. Parker admitted Friday he had been arrested nine days earlier on a DUI.
My point was that this was a misdemeanor, his blood-alcohol level was barely over the limit and that short of it being something habitual or even worse -- an accident -- special disclosure wasn’t really necessary. I didn’t care that the company waited so long to make this news public, and then doing so only after it was discovered by a reporter. I didn’t view it as a cover up. I figure more CEOs than we know have been nailed for driving under the influence.
Yale management professor Jeffrey Sonnenfeld, author of “Firing Back: How Great Leaders Rebound after Career Disasters,” couldn’t have disagreed more. His point was that this was a crime, pure and simple, and that investors should be informed when a CEO commits a crime. (Right, I thought, so they should send issue a press release every time the CEO gets a ticket for speeding?)
Then I looked at the Arizona DUI law: In the very minimum, a DUI misdemeanor requires the offender spend at least one day in jail. That, in and of itself, would require disclosure – not just if he was sentenced but the DUI, since jail would appear to be a possible outcome.
It gets worse: Turns out, according to a statement issued Friday night by US Airways, Parker has a history of DUIs, with three other “alcohol related incidents in my twenties. Two involved driving under the influence (one a misdemeanor) and the third occurred in college while a passenger in a friend’s car.” He claims he got a “wake up call” years ago after getting married and having kids and that this was simply “a mistake.”
Maybe. Or maybe this time he got caught. I guess the good news is that he wasn't flying a plane.
Bottom line: I goofed. If the CEO of a public company gets caught doing anything aside from a minor traffic offense, shareholders should be told. Period -- end of story.