When the CEO is sick, how much disclosure is enough?
On Tuesday, October 20, 2015, co-founding partner of Barack Ferrazzano Peter J. Barack was quoted in "When the CEO is sick, how much disclosure is enough?" published by Marketplace - a national daily business news source produced and distributed by American Public Media (APM), in association with the University of Southern California.
The article covers issues surrounding United Airlines' naming of an interim CEO after the company's leader, Oscar Munoz, suffered a heart attack a week ago. United chose not to comment on Munoz' course of treatment or the timing of his recovery. Peter pointed out that publicly traded companies have an obligation to disclose a change in leadership to investors but it can be difficult for boards of directors to balance medical privacy issues with investors' desire for information. He explained that it's generally not a problem under the securities law to stay silent about the executive's health unless there is what's called an affirmative duty to speak. Further, Peter stated, "There would have to be an expectation that the problem would have a material, unfavorable impact on net sales, revenues, or incomes."
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