Viewpoints

SEC, Board Investigations Muzzle Whole Foods’ Mackey

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The torrid pace of events concerning message-board posts by Whole Foods’ chief John Mackey may slow a little now.

Last week, Whole Foods acknowledged that the Securities and Exchange Commission contacted the chain about the posts, the chain’s board of directors said it would pursue an “independent internal investigation” into them and an apology attributed to Mackey was issued. Here it is, in its entirety: “I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards. I am very sorry and I ask our stakeholders to please forgive me.” Mackey also vowed to discontinue posting on the company’s website.

Let’s take a look at how events proceeded to this point by examining the distinction between message-board posts and posts on Whole Foods’ website. Without understanding that, little of this saga makes sense.

As has been widely reported, Mackey was identified as an anonymous message-board poster in a Federal Trade Commission memorandum issued in support of the complaint that seeks to bar the proposed merger between Whole Foods and Wild Oats. The message board is operated by Yahoo. It is intended to facilitate interactive conversations about Whole Foods. It is not controlled by Whole Foods. On the board, Mackey offered anonymous commentary, much of which defended Whole Foods, boosted its fortunes and disparaged its competitors.

This anonymous message-board puffing, known as sock puppeting, is not to be confused with posts Mackey made on Whole Foods’ website. There Mackey posted opinion and information under his own name, and engaged in repartee with various parties. At least Mackey’s identity was evident.

It’s Mackey’s undercover postings on the message board, spread across eight years, that are causing trouble. Many have questioned the legality of his actions, or, at minimum, whether he is fit to remain as the company’s top executive. It’s these postings that sparked the SEC’s and the board’s
investigations.

With that backdrop, let’s take a closer look at an explanation of sorts Mackey posted on Whole Foods’ website on July 11 about why he engaged in anonymous message-board posting: “I posted on Yahoo! under a pseudonym [rahodeb] because I had fun doing it. Many people post on bulletin boards using pseudonyms. I never intended any of those postings to be identified with me. ... The views articulated by rahodeb sometimes represent what I actually believed and sometimes they didn’t. ... Rahodeb’s postings therefore do not represent any official beliefs, policies, or intentions by either Whole Foods Market or by me.”

Little wonder Whole Foods’ directors are probing the message posts. Mackey is saying that he posted because it’s fun, many people do likewise, he didn’t expect to get caught and some of what he wrote wasn’t true. This is cold comfort. No chief executive of a company has the luxury or the right to risk sullying the brand and threatening shareholder equity by amusing himself with artless chatter.

Despite this, Mackey remains on SN’s Power 50 list in this week’s issue, Page 36. That’s because he is the co-founder of a chain that’s gradually changing the face of supermarket retailing. Flaming keyboard or not, that’s quite an accomplishment.

Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Jon Springer

Jon Springer has been writing about food, food retailers and food retailing for more than 10 years, and is in his second tour of duty with Supermarket News. His prior experience includes covering the...
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