WellPoint just announced that it has forced the resignation of David Colby, its chief financial officer, after an investigation uncovered undisclosed violations of the firm’s code of conduct.
It is disappointing, I imagine, for their incoming chief executive officer, Angela Braly, to have one of the first announcements under her watch be so embarrassing.
The company wouldn’t discuss the actual (alleged) misconduct, only saying that Mr. Colby’s conduct was not “illegal” and that “the policy violations were in no way related to the business of WellPoint.” I can only imagine that means the conduct must have been personal in nature?
Ms. Braly, outgoing chairman and chief executive Larry Glasscock, and WellPoint’s board asked for, and received Mr. Colby’s resignation.
I guess this is one example of accountability amongst healthcare “leaders.” Amazing what happens when an accountable board holds its executives accountable, no?
Update: Reuters has some even more bizarre details…
“Given the nonbusiness nature of the violations, the company will make no further comment on the circumstances resulting in the resignation,” WellPoint said in a news release.
Management during a conference call with analysts declined to take questions regarding the specific circumstances regarding Colby’s resignation, but said no other employee resigned in connection with Colby’s departure.
“I fully expect the rest of our management team to remain together,” incoming Chief Executive Officer and President Angela Braly said. She confirmed the accuracy of WellPoint’s financial statements and its outlook.
Larry Glasscock, the company’s current CEO and president, added that the action “in no way related to the CEO transition.”
Asked if management expects to be sued as a result, Glasscock said, “Dave Colby will do what’s right for Dave Colby.
“I believe we absolutely did the right thing based on where the facts led us,” he said.
Really, really bizarre. Needless to say, WellPoint’s shares are down nearly two percent so far this morning, as their shareholders are probably scratching their heads in bewilderment and bemusement (probably botherment, too, but no bewitchment, as far as I can tell)…
Another update… Honestly, this is sad. Bloomberg leads their article by pointing out that Mr. Colby was “named the best health insurance CFO each of the past four years by Institutional Investor magazine.”
What I found especially interesting, though…
The former finance chief was treated as any other employee would have been, Glasscock said.
“What’s really important is that all of us read and agree to abide by the code of conduct,” Glasscock said. “We don’t have double standards in the company. We have one set of standards that apply to everyone.”
That does it. I’m sold. Larry Glasscock wants to retire. He shouldn’t be allowed. Instead, I think he needs to become chief executive officer and chairman of Kaiser Foundation Health Plan.
on May 31st, 2007 at 06:30
any honest people left in health care?
on May 31st, 2007 at 08:35
Justen,
The Wellpoint matters should be reported to the SEC. Wellpoint shareholders should insist on a full investigation by this federal agency. All readers should be asking questions of the Trustees supposedly running their respective institutions, specifically as it pertains to financial conflicts of interest. They are very common, as you will see.
In the meantime, it is a must to continue to report instances of patient deathe or those in which patient safety has been jeopardized or compromised by dysfunctional IT devices to the FDA at FDA.gov. The implications of patient injury when there has been corporate violations of compliance are amplifed, and must be reported.
Best regards,
Menoalittle
on May 31st, 2007 at 11:30
I also think the open-endedness is somewhat unfair to Colby. Speculation must be running along the lines of pedophile, serial killer, rapist, Bush supporter — all non-business offenses. Transparency in a public company should not be restricted to what the company feels is relevant. No one trusts companies in healthcare anyway and a transaction like this just throws gas on the fire.