CEO’s leave puts light on governance dilemma

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When Cheryl Miller was granted a medical leave of absence from her role as CEO of AutoNation, the biggest U.S. dealership group was faced with the age-old question of how to balance her right to privacy with other stakeholders’ desire to know that leadership is sound.

AutoNation chose not to disclose details of Miller’s medical condition or a timeline for her return in an April 13 U.S. regulatory filing that said longtime CEO Mike Jackson, 71, who stepped down last year, would fill in for Miller, 47. Companies aren’t legally obligated to provide such details, regulatory and compliance experts told Automotive News, and a spokesman declined to elaborate on the filing or address whether Miller’s leave had anything to do with the coronavirus or the pandemic.

But COVID-19 adds a layer of complication to a company’s decision about what to disclose, in part because the virus that causes the potentially fatal disease is so contagious.

There is no indication Miller’s leave has anything to do with the coronavirus. But the question is a natural one, given the number of public figures who have tested positive. Among them is former Utah lawmaker Robert Garff, chairman of another dealership giant, Ken Garff Automotive, who died in March after contracting COVID-19. He was 77.

Many companies opt to say as little as possible about a CEO’s health, said David Bell, co-chairman of Fenwick & West’s corporate governance practice in Mountain View, Calif.

“It may be risky to make an incomplete disclosure,” he said. “And again, when you’re trying to balance somebody’s privacy interests and the risk to the company, that leans people toward not making disclosure.”

AutoNation’s board of directors met April 12 by telephone. It approved Miller’s request for leave that came over that weekend, said Chief Marketing Officer Marc Cannon.

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Saurabh Shukla

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