University Hospital Zurich has announced that Sergio Marchionne, the former CEO of Fiat Chrysler Automobiles N.V. (NYSE: FCAU), had been treated there for serious illness for over a year. Fiat Chrysler’s board and management said they know nothing about it. That “strains credulity,” as some people like to say. Hiding something of that magnitude for over a year, particularly for someone what was seen in public and attended hundreds of company and board meetings, does not make any sense.
A Fiat Chrysler public relations manager said “due to medical privacy, the company had no knowledge of the facts relating to Mr. Marchionne’s health.”
Really? And who or what is “the company”? Every board member? Chair John Elkann, who represents the family that controls Fiat Chrysler? Every single senior executive who reported to Marchionne?
The rules for a public company about ill CEOs are firm but may not be followed in many cases. A sick person at the top causes risk and the company needs to tell shareholders. They can buy, sell or hold shares based on full disclosure rather than being ambushed by bad news.
Marchionne smoked until a year ago, which is about the time he became very sick. He worked too hard, running from meeting to meeting and time zone to time zone. Some level of exhaustion would be been a good shield for a man who was sick and wanted to keep it quiet. But someone, or more than one, knew.