The death of former Fiat Chrysler Automobiles CEO Sergio Marchionne last month was an unexpected development, to say the least. It was only in early-July that the automaker publicly confirmed its chief executive had undergone a surgical procedure at a hospital in Zürich, Switzerland, at the time saying that Marchionne would only require a “short period of convalescence” before returning to work. Just over two weeks later, his successor was named, as news broke that the 66-year-old Canadian-Italian had slipped into a coma and had little chance of recovering.
Four days after that, he was gone.
Since then, we’ve learned that Marchionne had sought treatment from University Hospital Zürich for more than a year prior to his passing. FCA said in a statement that “due to medical privacy, the company had no knowledge of the facts relating to Mr. Marchionne’s health” in that time, but that hasn’t stopped some observers from questioning how it is that investors and analysts weren’t aware of Sergio’s ailments.
Were Fiat Chrysler Automobiles solely an American company, the public might have known sooner of Marchionne’s state of health, due to the US Securities and Exchange Commission’s rules about divulging such relevant information to investors and shareholders. But, Bloomberg reports, FCA is resident in the UK, and has headquarters in both Turin, Italy and Detroit, Michigan.
“Protection of personal data is a fundamental right in Europe and privacy is the rule and disclosure of personal data the exception, especially when it comes to medical information,” Tom De Cordier told Bloomberg. De Cordier is a partner at Brussels law firm CMS DeBacker who specializes in privacy law. “Under the [General Data Protection Regulation], medical and health-related data benefit from protection that is higher than for ‘normal’ personal data.”
In other words, Sergio Marchionne was likely under no legal obligation to disclose the details of his illness to Fiat Chrysler Automobiles. And since FCA was left in the dark, it’s difficult to imagine that the company would be held accountable for not publicly announcing what it didn’t know itself.
“The mere fact a CEO is ill” doesn’t mean that there’s “any obligation to inform fellow board members where he reasonably considers that it is not going to have any material adverse impact on his ability to perform his duties for the foreseeable future,” says Richard Ufland, a corporate finance lawyer at Hogan Lovells. And since a company’s “obligation is only to announce inside information clearly that [they] possess,” he doesn’t feel that FCA’s actions constitute a breech of the law.