Steve Jobs made millions of people happy with the innovative products he created for Apple Inc. With genius and vision that appears once in a generation, he also made many Apple shareholders wealthy; $1000 of Apple stock purchased in 1996 is worth over $30,000 today. Despite this, did Steve Jobs do shareholders a final disservice? His fatal illness raises the question – what information does a company’s CEO owe stockholders about his or her health?
Principles of medical confidentiality dictate a person’s health is a personal matter. However, there are legitimate exceptions to personal health privacy. Most notably, serious illness in the President of the United States, or a presidential candidate, is a matter of public interest. In the past, this has been more observed in the breach – Woodrow Wilson, Warren Harding, Franklin Roosevelt, Dwight Eisenhower and John Kennedy all had life-threatening illnesses while in office which were concealed to some degree from the public.
What about a CEO’s major illness? This information will likely affect price of the company stock and leadership succession. Shareholders would certainly want information about their CEO’s condition. This conflicts with the notion of personal privacy and the CEO’s understandable reluctance toward disclosure. Steve Jobs’s case is particularly instructive. No CEO was more intimately identified, or more important to his company. Because of his well-known penchant for privacy, the medical facts in Jobs’s case are not completely clear.
The newly released Jobs biography by Walter Isaacson sheds some light on his health. In October 2003, he was diagnosed with an unusual form of pancreatic cancer. Pancreatic cancer usually has a poor survival but Jobs’s malignancy was a specialized type and generally has a reasonably good survival with prompt surgery. Although the Apple board of directors was notified of his condition, no public announcement was forthcoming.
Nine months later, Jobs entered Stanford Hospital. He sent an email to Apple employees, his first public disclosure of his situation, “This weekend I underwent a successful surgery to remove a cancerous tumor from my pancreas…. I will be recuperating during August, and expect to return to work in September”.
This prompted public speculation over the nine-month interval between diagnosis and surgery. According to Isaacson, Jobs declined surgery for months, opting instead for alternative medicine therapies. In the interim between that surgery and his death, Jobs underwent a liver transplant and suffered many health setbacks, all of which were accompanied by vague, opaque or misleading statements by the Apple board or Jobs himself. Before he died, the public could see how sick Steve Jobs was, but he never told them. In his role as a private citizen, he did not have to. As CEO of one of the world’s largest corporations, he should have.
The Securities and Exchange Commission examined the issue of Jobs’s health and his ability to lead the company and dropped their investigation. Attorneys for Apple assured the board there was good legal standing not to notify stockholders of the gravity of Jobs’s condition. But in this era where more transparency is demanded of corporations, Jobs definitely owed a duty to keep shareholders better informed of his health and its impact on Apple. The SEC and the Apple attorneys reached the wrong conclusion. There is, of course, no simple answer to the competing issues of CEO health privacy and disclosure to shareholders. The balance Jobs and Apple’s board adopted is a case study for ethics courses at business and medical schools nationwide.
Steve Jobs’s died tragically too young. His contributions to society and his stewardship of Apple are legendary and many of Apple’s most innovative products were developed during his illness. Jobs’s health is undoubtedly a sensitive issue but, despite his genius of Steve Jobs, or perhaps because of it, Apple shareholders deserved greater disclosure.
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