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Wellpoint (NYSE:WLP) forced out a respected CFO due to some undisclosed transgression relating to the code of conduct. David Colby seems to be in hot water but no one can figure out what kind of problem. Wellpoint is making the problem worse by not disclosing the issue but has made the point that it was not an illegality and does not relate to the business of Wellpoint.

All this happens at a time when the CEO ranks were changing and the street would like some comfort with established names and faces. Eventually the story will come out but in the meantime the investor is being penalized because of a corporate governance issue. Corporate governance exists for the benefit of investors. Wellpoint investors are currently confused by a backfire.

The stock dropped about 3.5% yesterday. The term dead money is being applied but yet the appropriate corporate governance standards are being applied.

What we have here is the failure to communicate. The new CEO has a background in legal and government regulation so the "We are strict with rules approach" has an identifiable DNA. Has the new CEO shot herself in the foot and forgotten about her real bosses the shareholders.

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