Steve Jobs’ Health & a CEO’s Privacy

How much privacy does a CEO deserve? Is his or her health a private matter, or a matter that should be open to the scrutiny of the public (and, in particular, of the investing public)?

See, for example, this piece by Miguel Helft, at the NYT: Jobs Takes Sick Leave at Apple Again, Stirring Questions

Steven P. Jobs, the visionary co-founder and chief executive of Apple, is taking a medical leave of absence, a year and a half after his return following a liver transplant. The leave raises questions about both his long-term prognosis and the leadership of the world’s most valuable technology company….

So, should Jobs tell all, letting shareholders and potential shareholders (and other stakeholders?) just what’s up with his health, so that everyone can adjust their decision-making accordingly? Some say a CEO has as might right to privacy as anyone else. Others say a CEO’s obligation to be transparency overrides that.

As Slate’s Annie Lowrey tells us:

While publicly traded corporations need to disclose events and changes that might “materially” affect the company, the Securities and Exchange Commission does not specifically require disclosures about CEO health. That vagueness in the law means that Apple has remained within the letter of the law with its disclosures….

I don’t have a strong view on this, but here are some thoughts:

1) Information is good; it’s what lets markets operate more rather than less efficiently. But a big part of what matters most is equal access to information, and so far there’s no worry about that here, as far as I can see. (It may be that some are worried that top insiders will trade Apple’s stock based on their insider knowledge. Doing so would probably be illegal, and hence very dangerous.)

2) Health is a spectrum. There are people in the pink of health, and people on death’s doorstep, and everything in between. All CEOs are somewhere on that spectrum, and there’s simply no clear line beyond which a CEO’s health becomes a worry. So if Steve Jobs needs to disclose his diagnosis, the same likely goes for all CEOs (and other senior executives?) Note also that medical prognosis is as much art as science. So even if, say, Jobs were to reveal that his doctors were giving him a year to live — well, frankly, that could mean he’d be dead in a month or in 5 years. We have good evidence that doctors just aren’t good at making those estimates.

3) The basic, crucial info — that Jobs has ongoing health problems, likely quite serious ones — is already out there. As a former SEC chair Arthur Levitt says,

Jobs going on medical leave sends a message to the market,” Levitt continues. “An intelligent investor should know the risks of Jobs having a relapse. For the board to opine on what the extent of the illness is right now I don’t think is really necessary.”

In the end, I guess I’m most worried about the slippery slope, here. There are lots of things investors could want to know, and lots of things they could argue they need to know. But that doesn’t mean we want to push on down that road.

5 comments so far

  1. […] This post was mentioned on Twitter by Chris MacDonald, Chris MacDonald. Chris MacDonald said: Steve Jobs's Health & a CEO's Privacy http://wp.me/pUlJj-Cx […]

  2. Rogerio on

    Despite his unquestionable talent, deserved reputation and influence on Apple’s performance, Jobs is a human being who owns the right to manage his personal affairs as he wishes. He can’t be trapped by his own success and should decide for himself, with the help of his family and close friends, what information he believes is appropriate to be made public. The right to privacy is extended to every individual and it’s the foundation of a society who values individual freedom and respect to others. Speculating on his death as how it would impact Apple’s share price dwarfs the value of his life and the challenges he and his family are dealing with.

    Moreover, Jobs is not Apple. Apple is more than just one person, even if that person is Steve Jobs. Even though his brilliant contribution earned him the status of a semi-god, the organization has a proven record of successful execution and innovation. Investors should not forget the fundamentals of a successful organization and it’s ability to remain competitive. Jobs is certainly an outlier and brings outstanding vision to the company, but Apple should be capable to continue his legacy.

    It’s unfortunate that Jobs is going through critical health issues. Just as regrettable is Apple’s inability, or unwillingness, to create a structure in place that resembles Jobs vision and builds confidence in the marketplace that Apple can continue to be innovative and competitive even without him. I wonder if the ethical issue here is how much an organization accepts, or intentionally creates, unreasonable dependency on a single individual to the extent that his human condition and rights can be questioned in the name of wild capitalism.

  3. Bruce Philp on

    I’m not sure I could agree with Rogerio on a couple of major points.

    First, Jobs kind of is Apple, actually. He runs the company in a way that gives ‘hands-on’ a new meaning. A benevolent dictator, the vision for the company and its products is very personally tied to him and to his partnership with Jonathan Ive. Setting aside the technicality of public shareholders, Apple is all but a sole proprietorship.

    Second, when a person elects to use personal fame to build capital value, they unavoidably give up some moral rights. Yes, Jobs is human, just as Michael Jackson was or Barack Obama is. But some of the autonomy we all enjoy gets sacrificed to wealth and power in a situation like this. Jobs and Apple are very much in that pickle. Every new product introduction, every public statement of any substance, has come from the man in the black turtleneck and the 501s. Little effort has been made until now to spread the credibility around in that organization. Apple is a cult of personality.

    All in, I’d say that there is no strict ethical requirement for Jobs to give up his privacy, but the interests of millions of shareholders who bought in on the strength of his singular – not to say slightly fascist – vision might suggest there sure as hell is a moral one.

  4. Bucktooth on

    Steve Jobs has been I’ll for a long time. This can affect what happens in the company considering he is the leader!
    Pancreatic/Liver cancer is very serious and is of concern for all of us!
    For right now we can only pray for he and his family for whatever may be ahead for them.

  5. CEO’s Health: Private Matter? | on

    […] also: Steve Jobs’ Health & a CEO’s Privacy […]


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