If You Think Steve Jobs' Health Is Not a Material Event...

You probably think the Iranian election was a triumph of pluralism and democracy. Okay that's a bit of an exaggeration but I love to have fun with the headlines. I just saw someone on TV try and argue that what the board was doing made sense and I had trouble understanding the defense of his position. Steve Jobs is probably the best innovator in the last 50 years, perhaps a lot longer than that given how he has transformed the PC industry and now wireless.

So all this means the issue of material disclosures around the health of Steve Jobs is all over the news again. This really is a symptom of some sort of fiduciary dysfunction with the board.

You have to disclose all material issues for public companies. Steve is probably the most impactful CEO out there and if his health is an issue you have to disclose it and not doing so is unethical. Period.

Look, I love what Steve has done for wireless--he's turned it into an interesting segment again and done wonders for technology. If it wasn't for Steve, our best hope for an interesting product would be the fall release of the Zune.

If I were Steve, why not just make a disclosure that if you want to invest in Apple (AAPL) you should assume the CEO has serious health issues and he may have to exit his role at any time. If investors have to assume the worst, then Apple can't be accused of misleading them about the ability of the CEO to continue in his role and innovate. This whole guessing game about maybe he is healthy or not, with inside scoops on friends of friends who say they heard something happened is bad for the company, bad for succession plans and not ethical.

The fact this saga is still dragging on and being handled improperly is a sign of some kind of board governance issue. Somebody isn't communicating with somebody or is afraid to tell someone the truth. I imagine there is quite a bit of emotion involved and it's a difficult situation trying to tell someone who is deathly ill what to do about a company they have created not once but twice (by saving Apple with his return).

One can hardly blame the board for deferring to Steve's wishes given how important he is to the company but it also shows the board is not properly functioning. It also highlights how important he is to shareholders and how material his health really is.

That said, I wish Steve Jobs a happy/healthy recovery and hope he stays with Apple a very long time. Get better soon Steve Jobs.

Comments

[Julian Ivan-Alexander]

"The fact this saga is still dragging on and being handled improperly is a sign of some kind of board governance issue. "

No. Its a sign of media obsession and writers whoring for hits.

2009 Jun 23 05:59 AM

[uncleralph]

"... you have to disclose it and not doing so is unethical. Period."

The other side of this is that if AAPL opens the can of worms by publicly disclosing the health matters of it's CEO it will be a never ending fiasco of shareholders insisting on knowing every detail of his recovery. 'Did he visit a doctor last week? what was that about? is he running a fever? how high is his fever?'

investors may well be unhappy with the deafening silence that comes out of AAPL but believe me it is much better than the alternative. The bigger picture is how this shows a gray area in the law with capitalism going up against an individuals rights to privacy.

2009 Jun 23 08:46 AM

[rrtzmd]

...the problem is that Steve suffers severely from denial of mortality...he refused to accept he had malignant cancer and went searching for "holistic" cures that only resulted in allowing the cancer to progress to a terminal situation...he underwent a palliative surgery but apparently still didn't understand that his condition was terminal...finally, he goes to the extraordinary length of undergoing a liver transplant...and I suspect he STILL doesn't believe his condition is terminal...if Steve can't accept reality then that's his problem...the board's responsibility is to do what's best for the company...they should go ahead and designate a successor and get the company moving into the post-Jobs era...

2009 Jun 23 09:07 AM

[peter02l]

"You probably think the Iranian election was a triumph of pluralism and democracy. Okay that's a bit of an exaggeration but I love to have fun with the headlines."

Fun with the headlines? Show some consideration. People are being killed for demonstrating over there. Did you love to have fun with the headline in 9/11?

2009 Jun 23 10:27 AM

[sleepy]

"The fact this saga is still dragging on and being handled improperly is a sign of some kind of board governance issue."

This is drivel. It has been handled perfectly. His medical records are a private matter. Any likely impact of ill-health on the company's operation has to be disclosed. It was: The company disclosed the expectation of a 6 month absence, confirmed it after the operation, and he's back at work now. What more can a shareholder expect?

rrtmzd: Where is your evidence that there is any "denial of mortality", that SJ did not accept the original diagnosis, that the cancer is terminal, that that the original surgery was merely "palliative". You're the one living in a make-believe world, not Steve Jobs, who by my reckoning is frighteningly logical in everything he does, including the handling of his cancer.

2009 Jun 23 11:05 AM

[reddog]

give the man some privacy. He is one person for goodness sake. if you are that concerned about his impact to the company, get out of the stock. Its more risk than you can handle.

2009 Jun 23 08:11 PM

[donzelion]

I'm no fan of "great man" theories of company management, BUT if companies appoint specific individuals with an eye to their effect on market values, then CEO health becomes as relevant as CEO compensation. If boards are permitted to pick and choose, then they degenerate into media relations filters, rather than corporate officers with important duties. "Privacy" exists for those who desire privacy - not for those who seek the benefit of the public view but are unwilling to pay the cost for such benefits.

I admire Steve Jobs, and wish him well, but I despise the cult-like following, comparable only to Greenspan's cult just a few years ago. Investors ought to focus on whether companies like Apple can hold on to their profitable niches, whether those niches will grow over time, and what new niches are within a company's grasp.

2009 Jun 24 04:12 AM

[rrtzmd]

...well, let's see...presuming the news reports were accurate:

valleywag.gawker.com/3...

www.forbes.com/2009/01...

...per THEIR account, he was diagnosed with an islet cell carcinoma...these have a pretty good prognosis if caught and treated EARLY -- BEFORE they have metatstisized:

seer.cancer.gov/public...

...unfortunately, Mr. Jobs thought he could handle it with a little meditation and some herbs and spices...oops!...didn't work -- hence, the Whipple procedure...the Whipple is a dramatic procedure that is not considered curative...it is PALLIATIVE -- i.e. it is meant let the TERMINAL patient resume a reasonably normal life until the metatases present further problems...further problems such as metastatic disease of the liver...evidently that is what happened to Mr. Jobs...regardless, the board of directors reponsibility is to the shareholders -- NOT to Mr. Jobs...it's their responsibility that a plan of succession is in place and that a plan for a future without Mr. Jobs is ready...


On Jun 23 11:05 AM sleepy wrote:

> rrtmzd: Where is your evidence that there is any "denial of mortality",
> that SJ did not accept the original diagnosis, that the cancer is
> terminal, that that the original surgery was merely "palliative".
> You're the one living in a make-believe world, not Steve Jobs, who
> by my reckoning is frighteningly logical in everything he does, including
> the handling of his cancer.

2009 Jun 24 08:50 AM