Full disclosure was never part of Jobs’ job

Guest post by Michael Dresner, CEO of Brand² Squared Licensing, the strategic licensing division at Peppercom

Apple_steve_s_blood_683003pThe number of articles and blogs about late Apple Founder and CEO Steve Jobs have been limitless in recent weeks, and his legacy has been hotly debated. To summarize it all – many of his contributions to business, and to consumer products, can be described as brilliant.  And, many of his managerial practices can be described as toxic. Both points of view have been embellished – let’s face it. Yet one perspective has gotten a slightly less attention in recent weeks. It deserves thought.

Steve Jobs was diagnosed with pancreatic cancer in 2003.  Five year survival rates according to the American Cancer Society are less than 6%. At the time he was the CEO of a public, high-growth Fortune 500 corporation.  Furthermore his personal and iconic status was inextricably linked to Apple brand associations.  His tenure at Apple would (and will) have a direct effect on the corporation’s longevity.

Did Steve Jobs have an obligation to disclose his illness? To the public, to his employees, or his board? This could be a matter of opinion.  And mine is:  no way.  He didn’t have to tell a soul. Ever.

Allow me to clarify.  A seismic difference exists from disclosing personal health problems (which may or may not be fatal) and proactively establishing a succession plan for high-profile leaders in such case that said leader is suddenly unable or unwilling to perform the task at hand.  The latter was Jobs’ requirement.  Long before Jack Welch retired he was vocal about possible CEOs that would one day replace him, acknowledging several by name.  Microsoft has always promoted senior managers in the press by name, long before Bill Gates stepped down from the CEO and Chairman roles.  Jobs rarely did that.  (Neither has HP or Yahoo! if you have followed those revolving doors.  Jobs wasn’t alone in that weakness.)  The press cannot mention more than five people other than Tim Cook who even work at Apple.  And that’s a shame because among the best parts of genius is ensuring it is imparted to others.  To say nothing of the fact that if Jobs was terminally ill, or if he perished in an accident, or decided to move his family to Rio, the company was at potential peril.  In terms of his personal future, this is where Jobs’ – and his board’s – responsibility begins and ends.

Jobs’ health was nobody’s business but his own.  Maybe he would beat the odds of pancreatic cancer.  Maybe he would perish in an unexpected accident.  Maybe he would suddenly resign to spend time with his family years before he did.  He had the right to do any of those things, employment agreement notwithstanding.  And who are we, as investors or consumers to expect him to tell us about his personal health?  Perhaps we should tell President Obama to quit smoking and Governor Christie to lose weight, or take away their right to pursue reelection.  Those are behaviors that can lead to fatal illness.  Heart disease is a far more common fatality than cancer among men. I’d like to take things a few steps further. Every 15 minutes someone perishes in an automobile accident. (Pancreatic cancer is far more rare.) So I think the leader of the free world, if not flying Air Force One, should be required by law to ride his bike. That’s a lot more healthy than sitting in the back seat of a limo.

This sounds absurd because it is absurd.  Obama doesn’t have to acknowledge this nonsense.  He has a back-up plan – Vice President Biden.  Let’s find Steve Jobs and any CEO of a public company at fault for not building a succession of increasingly talented managers to pick up where she or he leaves off.   Never require an individual to reveal his personal health problems to stakeholders when the responsibility is professional and fiduciary.  The expectation is invasive and offensive.

P.S. The Securities Act of 1933 and Securities Exchange Act of 1934, requires companies with publicly traded securities to make fair, timely disclosures of material information to the investing public.  One can reasonably interpret federal law to require Jobs to timely disclose his pancreatic cancer to Apple shareholders.  The Office of Civil Rights enforces HIPAA Privacy Rule, which protects the privacy of individually identifiable health information.  And of course the fourth Amendment to the U.S. constitution has been oft applicable to rights of privacy.  I’m happy to weigh the integrity of HIPAA, the U.S. Constitution and the SEC on this or any matter.  The SEC loses. 

2 thoughts on “Full disclosure was never part of Jobs’ job

  1. Michael: While I applaud your courage in supporting an irrational, if not untenable, stance I must take exception with a) your grasp of the free enterprise system and b) your sanity. The CEO of a publicly-traded company MUST, repeat MUST, disclose the state of his or health if said health has suddenly taken a decided turn for the worse. That’s especially true in the case of Apple where Jobs WAS Apple, and vice versa. Jobs refused to disclose his fatal illenss for a full nine months. Repeat; a FULL nine months. As a result, he recklessly endangered the investment portfolios of institutional shareholders, employees and little people alike (note: in this rare instance, I am NOT refering to midgets when I speak of little people). Apple is a market marker. And Jobs was THE market maker within Apple. You are 100 percent wrong in arguing that CEOs such as Jobs shouldn’t disclose MATERIAL information, a la a cancer diagnosis. I can only hope that, god forbid, if you should contract a apotentially fatal illness, you share that information with Ed, Dame Heather Alana and other key Brand Squared Squared stakeholders. To do otherwise would be unethical, unfair and, from a business standpoint, unwise to them, Peppercom and Brand Squared Squared itself. In this case, Michael, silence isn’t golden. It’s toxic.