Wellpoint announced this past week that the organization insisted that its CFO, David Colby, step down due to an unspecified violation of the Wellpoint Code of Conduct. According to the company, concerns raised in “recent days” prompted Wellpoint to act swiftly by commissioning an outside legal firm to investigate – the firm then confirmed that violations had occurred.

The company would not specifically cite which elements of their Code Mr. Colby violated. Instead, the company only stated that the violation did not involve illegal conduct and was “in no way related to the business of Wellpoint.” When the CEO of the company was asked on an analyst call whether the company had considered giving Colby a second chance, he responded, “We don’t have double standards in the company. We have one set of the Code of Conduct that applies to everyone.”

Commentary: While an unfortunate incident for all parties involved, we admire Wellpoint’s decision. Colby loses over $1.6 million in options in addition to his job. Wellpoint loses a CFO highly regarded by Wall Street analysts. It was no surprise that the company’s stock dropped sharply (3.5%) as result on the news. This is a tremendous example of the “non-tolerance” attitude that is increasingly pervasive in corporations, where all employees held to equal standards when it comes to abiding by the organization’s Code. Wellpoint’s decision to specifically mention that it was a code of conduct violation (but refusing to name exactly what it was beyond being “non-criminal”) is interesting. While we suspect the intention is to prevent Wall Street from panicking and believing it was something worse (as one might when a CFO suddenly departs), there is also a clear message of “ethical from the top” sent to all employees.

Care to speculate about what the violation might have been? You can see Wellpoint’s Code of Conduct here.