IS THE HEALTH OF A CEO PRIVATE MATTER?

By Ruma Dubey

Two weeks ago, the CEO of Google, Larry Page’s absence from the company's quarterly earnings conference call sparked concerns about his long-term health. He has been absent from most of Google’s public events for the past one month as he has lost his voice.  Though Larry Page has reassured that his health is fine, there is major concern about his health and that of Google.

Last year, the death of Apple founder, Steve Jobs, sent shockwaves across the world though we all knew that he was sinking. The iPhone was launched in 2007 and in 2009, Steve announced that he had a liver transplant. And it was also published that the tumor had metastasized from his pancreas to his liver in spite of the surgery.  There was so much transparency about his health and that made us wonder whether the health of CEOs who run such big companies, can be kept private? With so much money riding on the company, which in turn means on the health of the CEO, can health issues be shrouded under blankets? We talk about corporate governance all the time but forget that this is not just about the financial and social health of the company but also about the physical health of the person leading the company.

In India, corporate governance is just about gaining significance but do we ever hear about the health of a CEO? Just as having a sound management is important to run the company, isn’t it equally important to know and be assured about the physical health of the promoter?

Take the case of Aditya Birla. At the age of 51 years, he was diagnosed with prostrate cancer and that too which had progressed to the last stage. He was bundled up the middle of a stormy night into an aircraft for treatment at the John Hopkins Hospital in Baltimore, USA. Here, everyone was told about him going for treatment for a slipped disc while employees said it was for treatment of pneumonia. It was only after his death that people knew the truth.

The greatness of Aditya Birla is undisputable and what he single handedly did for the country is part of Indian corporate folklore. At that time, in 1995 (he passed away on 1st Oct 1995) corporate governance was not in existence and maybe such transparency was not needed. But today, in 2012, if the CEO of a huge conglomerate is diagnosed with cancer, would it be morally right to not disclose this vital news?

The health of a person running a company is extremely important as he/she is directly responsible to the shareholders, partners and all those financially entwined with his company. A very pertinent example in this regard comes to mind. Anil Ambani, when he was a part of RIL, had gone for a roadshow abroad. At that time, he was on the “plumper” side. And at one of the conferences, a foreign investor told him that they would think twice before investing in a company whose management was not in good health. That got him thinking and he announced publicly that he would work hard and get fitter. Till date he takes that very seriously - he jogs, runs the marathon. And unarguably he is one of the fittest individuals in India.

Handing over the reins is a different thing, like Narayan Murthy or Ratan Tata to Cyrus Mistry. But sudden death is what is worrying. No one can predict death. Even a completely hale and hearty person could suddenly fall down dead. Like Dewang Mehta, the head of NASSCOM who died of a heart attack in Sydney.

The debate rages world over – whether the CEOs health is a private matter? When the company is CEO-centric, when the CEO is the face of the company and controls all functions in the company, then from a moral or ethical angle the company may choose to disclose to the regulatory authority about the long absence of the CEO from business.

Maybe, just as SEBI stipulates that companies declare their financial health, maybe it is time to ask promoters to show a certificate of good health too. Yes, in a country where the leader of the ruling party, Sonia Gandhi scuttles off to USA for treatment, giving no whiff of her ailment to the entire country, would it be right to expect transparency from company promoters?