Steve Jobs' Apology: A 'How To' Lesson in Corporate Governance

Includes: AAPL, HPQ
by: Yankee Group

By Carl Howe

Apple’s (NASDAQ:AAPL) special committee reported its findings in its stock option investigation Wednesday evening. CEO Steve Jobs apparently knew of the options backdating, but hadn't known its accounting implications. His statement was:

I apologize to Apple's shareholders and employees for these problems, which happened on my watch. They are completely out of character for Apple," said Steve Jobs, Apple's CEO. "We will now work to resolve the remaining issues as quickly as possible and to put the proper remedial measures in place to ensure that this never happens again."

The iPodFather (Steve Jobs): sorry about wrongdoings which occurred "on his watch"

From a communications point of view, this is exactly the type of statement you want. It expresses regret, it's clear, and it's forward-looking. Compare that with the comments of Hewlett-Packard (NYSE:HPQ) CEO Mark Hurd regarding HP's pretexting scandal, which I've quoted here from CNET:

"I believe we have now a substantial set of the facts," Hurd said. "I will also say that some of the findings that Morgan Lewis has uncovered are very disturbing to me."
"Our investigation is not complete. There is still more work to be done,"
"As of today, we still do not have all of the facts," Hurd said. "I also cannot guarantee that we will ever be able to obtain all of the information regarding this investigation. This is due to its complexity, the number of people involved, with many of them outside the company."

Now I have some sympathy for Mark Hurd, who pretty much walked into this mess that had been started long before he arrived. But which company do you think is going to get better press as the results of those communications? And how much better would it have been if Hurd had stepped up and said, "I apologize to HP's shareholders and employees for this situation. Regardless of the circumstances, as CEO, I'm responsible. I commit to making whatever issues HP has been involved in right and ensuring they never happen again."

Moral to CEOs: Take responsibility - that's why they pay you the big bucks! Jobs understands that, since Apple was originally his company. Would that more CEOs did.

Disclosure: The author owns Apple shares.

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