Are a CEO’s health problems a private matter?

January 18, 2009

dr-jgsm-05— Dana Radcliffe is a Day Family senior lecturer of business ethics at the Johnson School at Cornell University. The views expressed are his own. —

Are a CEO’s health problems a private matter? Or does he or she have an obligation to disclose them to investors and other stakeholders?

These are questions Apple and its iconic co-founder and chief executive Steve Jobs have had to face ever since he was diagnosed with a rare form of pancreatic cancer in 2003.  Happily, the disease proved to be treatable with surgery, which Jobs underwent in 2004.  But shareholders didn’t learn that Apple’s chief had been ill until he sent out an email to employees, announcing that he had had cancer but was now “cured.”

The issue of what, if anything, the company should disclose about its CEO’s health concerns resurfaced last summer, when Jobs spoke at Apple’s annual developers conference.  There he appeared, as the New York Times put it, “unusually thin and haggard.”  Reacting to the inevitable rumors that Jobs was ill again, the firm’s public relations department reported that he was suffering from “a common bug.”


However, according to the Times’ John Markoff, Jobs told some associates that he was experiencing “nutritional problems.”  Moreover, people close to Jobs told Markoff that in early 2008 he had a surgical procedure to treat a problem related to his weight loss.  Yet, in July, in a conference call after the release of Apple’s quarterly earnings statement, a senior officer deflected an analyst’s question about Jobs’s health, calling it “a private matter.”

Not surprisingly, investor uncertainty about whether Jobs would be able to continue as CEO was reflected in sharp fluctuations in the price of Apple’s stock.  In December, the worries intensified when the company said that Jobs would not give his much-anticipated annual keynote address at Apple’s Macworld conference.  At first, the reason offered by a spokesman was that the firm would not take part in the event after 2009.  That “explanation” only fueled the rumors.

So, last week, Jobs responded by issuing a statement.  About his weight loss, he said doctors had finally determined that it was due to a “hormone imbalance”—a “nutritional problem” whose remedy “is relatively simple and straightforward.”  This announcement seemed to calm investors, with Apple’s stock price rising by 4 percent.

Then, this week, Jobs emailed Apple employees that he had just learned that “my health-related issues are more complex than I originally thought.”  Consequently, he said, he is taking a six-month medical leave of absence, although he will “remain involved in strategic decisions while I am out.”  The news alarmed investors, as shares dropped 7 percent in late trading.

Clearly, Apple and its chief executive have not been diligent in keeping investors, employees, and other stakeholders informed about the state of Jobs’s health.  Should they have been?


From a legal point of view, the company has a duty to disclose information that is “material”—i.e., facts a reasonable investor would need to know in order to make an informed decision about whether to buy or sell the company’s stock.  Materiality can be difficult to establish, and if litigation ensues, lawyers will argue at length over exactly what Apple should have revealed and when.

But, from an ethical point of view, the answer seems less arguable.  To be sure, Steve Jobs, like anyone else, has a right to keep details about his health problems private.  But an individual’s right to privacy is not absolute.  In this case, it has to be balanced against obligations Jobs and his board of directors have to Apple’s stakeholders, especially its shareholders, employees, and customers.

Since Steve Jobs returned to Apple in 1997, its breath-taking success has been due in no small part to his visionary and aggressive leadership.  Many investors worry (rightly or wrongly) that Apple would not be as innovative and market-savvy without Jobs’s famously tight control over its direction and operations.  Apple well knows all this—indeed, the company has shrewdly leveraged the immense admiration and popularity Jobs enjoys, encouraging the identification of Jobs with the Apple brand.  So, by design, investor confidence in Apple has been based to a considerable degree on confidence in Jobs’ leadership.

In general, the company has an ethical obligation to alert investors—and other stakeholders—to serious risks to the company’s health.  Because Apple and its CEO have actively encouraged “the Apple community” to associate the company’s success with his leadership, they have an obligation as well to keep stakeholders apprised of serious risks to Jobs’s health.


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Considering apple’s deceptive past, it’s not surprising he’d try to deceive every one. I hope he gets better, but that said, apple’s very over rated. Most of what’s perceived to be great or technological is nothing more than a series of clever ads designed to fool mostly high school and college kids along with a handful of 30+ idiots. They’ve built their entire business on making fun of other companies, including ms. This isn’t new, but goes back 25+ years. Only the ipod was kind of technological, but their desktops are 95% hype. They give the audience of a feeling of false superiority in a way that makes them feel smart. As in “think different”. It’s too much to try and prove this here, but most people recognize what they are doing with their brain washing tactics. IN the past 25 years, I’ve found that most people who kept buying apple were brain washable idiots with a few tech skills. And funny thing is that their personalities were usually the kind that enjoyed making fun of things to help them to feel better about them selfs. Oh well…

Posted by jz | Report as abusive

I and most (but not all) of my family are Mac users and JZ’s comments to label us as “mostly high school and college kids along with a handful of 30+ idiots” with “Few tech skills” is more than a little insulting and a stupid generalisation. The story was about whether the health of a CEO should be considered a private matter or part of a company’s duty to disclose information to investors, not an excuse for a bit of “Apple bashing”. If I had posted similar comments about Wintel users “All Wintel users are corporate clones and sheep with no imagination” then I would rightly expect to be criticised for the simple reason it’s obviously not true! Returning to the story, my personal view is that Apple is difficult situation, if I were a CEO suffering from Hemorrhoids, I would consider it a private matter, but what if the symptoms were heralding something more serious? Should every CEO’s rash, cough, ache or pain be posted to the corporate website so investors can google the symptoms and decide whether they should buy or sell? I hope not! Steve is undoubtably a great CEO and I wish him well. He has steered Apple to great heights but as he often points out, he doesn’t do this alone, there is obviously a great team of designers, programmers and executives that produce these products…

Posted by Mark Rasmussen | Report as abusive

ABSOLUTELY. A public corporation is not a private entity: all participants in the welfare of the corporation (shareholders, employees) have an obligation to know the details of any integral component, perceived or otherwise. This is quite different from the privacy obligations to, say, a factory line worker.

In an era of obscene corporate compensation for executives, this is part of the price of admission. Get used to it.

Posted by Bob | Report as abusive

obscene corporate compensation… Good point! But how about sports or movie stars? These guys do not even work.

Posted by Klaus | Report as abusive

So a mac user is a person with “few tech skllls”? maybe that’s becuase you do not need tech skills when using a mac? I consider that progress but hey, im a mac user so what do i know? :) Jz comments is refreshing in that such comments shows there are still room for apple becuase their are still people out there that simply dont get why apple do the things they do. Their deepest motiation is not profit and will never be. that just follows when “stupid” non techy people can and actually want to use the stuff that comes out of their product development..

Interesting article and one that needs to be debated. There is clearly need to define what is private when you are the boss of a high profle company. If you are potentially terminally ill, id consider that private.

Get well soon Steve.

Posted by mac4all | Report as abusive

Everyone deserves the right to privacy regarding their health. As an ICU nurse many people receive news that is inconclusive, requires further testing before a diagnosis can be known, or an ailment that does not respond as expected. Medicine is as much art as it is science. If Jobs is attempting to keep his investors appraised of his well being as an act of good faith so be it. If one can prove willful deception its another matter. I tend to feel he is exploring a difficult and private diagnosis whose details and eventual outcome may be a challenge to adjust to. No-one has a right to expose that private process to a media frenzy.

Posted by Liz | Report as abusive

With fame and fortune comes public scrutiny and there’s little privacy, particularly if a person is a prime mover in a corporation, company or government. If Jobs’ problems were not reported and left to millions of imaginations,the paparazzi would be all over him 24/7 looking for the slightest change in appearance, demeanor, whatever.
So yes, a general explanation of the state of his health is required but excruciating details are not.

Posted by Ray | Report as abusive

Apple and Windows-bashing is not to the point, so let’s skip it. Unlike many companies, Apple’s image and product line is very tightly tied to Steve Jobs. This is in keeping with his personality from the beginning of the company- Jobs is a hustler and focused on success. To achieve this he is very controlling and demanding and has sought out and holds on to his power very deliberately; his reluctance to be open about his health is in keeping with his personality. His private life is a closed book, as far as he is concerned, because exposing that risks his power and control- and by extension, his wealth. Whether external observers think that he has an obligation to report his health information in detail, he does not think so- indeed, it is probably anathema to him. He might quit Apple rather than reveal that information. While other analysts have talked about Apple having a “deep bench,” that deep bench doesn’t matter. Steve Jobs is Apple- the company is an extension of his personality. Without him, Apple changes dramatically (as has already been seen in the period when Jobs was forced out of Apple, which almost killed the company, and the dramatic resurgence since his return). As a result, for investors and even customers, Steve Jobs’s health is a material fact that should be disclosed. Jobs has created that situation and must deal with it.

Posted by Cunamara | Report as abusive

Surely the disclosure that is material is the fact that SJ is unwilling to publicly discuss his health? If does not wish to invest in a company in which that is the case, either either because one can’t quantify the risk, or because one can quantify it and it’s too big, then one should invest elsewhere. That’s just straightforward due diligence.

Ten years ago, my company found itself negotiating a licensing deal with Apple. In the end, due to SJ’s “take it or leave it” approach to negotiations we walked away from the deal. That’s life. Sure, if Apple had been run by a less uncompromising personality, then we might have signed a deal which made us more money. But that doesn’t give me the “right” to complain that Apple is run by the “wrong” person. And the same goes for those who invest (or don’t invest) in Apple – especially when nearly all of the risk at the moment stems from the oanicky reactions of other investors and not at all from the company’s earnings potential with or without SJ….

Posted by Ian Kemmish | Report as abusive

Bob is correct. Today’s public corporation CEO and other top execs are part of the product or service package offered by the company. Anything that effects the viability of the company is relevant.

Posted by Doctorzen | Report as abusive

Disclosure based on salary? What an ethical joke. In order for any ethical claim to be valid,it has to be universal. So a CEO does in fact have the same rights as a factory worker and anything less is pure claptrap.

If we value privacy in our society,medical or otherwise, then few exceptions, if any, should be acceptable. So this entire public and private argument is a junk argument along with the salary distinction.

Many jobs require a pre-employment screening and now we are asking that medical conditions be disclosed for the basis of stakeholder/shareholder rights? What about the rights of Mr. Jobs? Are we to run roughshod over every individual liberty on the basis of money?

Let Mr. Jobs take his medical leave without the prying eyes of the public. His medical problems are his burden, and not some day traders.

Posted by Robbie | Report as abusive

The role the employee in the organization and the seriousness of the ailment are two vital things that needs to be addressed before deciding if the health condition needs to be disclosed or not. In case of Apple, consdiering these two factors, since revealing the news makes difference in the market, it has to be.

Posted by Hari | Report as abusive

Hey ! Stevey’s ill ! it is his personal matter and ya baby there is absolutely no need for the CEO to disclose his ailments to the investors – Take this from a CFA.
Letz say Stevy is seriously ill (God forbid), he is not able to walk, weak and frail – so what, he can still come up with amazing products you do not have to run around and display Arny muscles to invent an Ipod. Imagine a ill Stevy on a acutated wheel chair giving a presentation at the Macconference !!! I am absolutely sure all of you will agree that the enigmatism and charisma will be no less that it has been !.Steve created Apple – itz his child, he loves it more than any thing in the world, no matter what ailment or suffering … deep down we all know there is no one like steve or ” His ” Apple. On a ending note…who is perfect, look into yourself, the guy has some flaws…forget them…look at the good he’s done.

Posted by GobarKing | Report as abusive

Apple has developed in something more as “just” a company. It is cult!!! To own the newest Apple device is not only question of technology progress, it is the question of fashion or good style. Steve Jobs impersonate Apple, its success and good style. It is only logical, that his health problems awake huge public disscusion and worry. Since shareholders and investors believe, that Steve had and have major influence on Apple’s success, it is logical, that they are concerned (you could see it on the stock market). So back to the question. Are health problems of Steve Jobs private matter? The answer is no, at least since he is the CEO of Apple! I can only wish him soon recovery.

Posted by Tomas Racek | Report as abusive

I echo the “best” comment. If and when your due diligence process in a company establishes that one figure is strategic to the long term prosperity / survival of the company it is just natural to need to know what is happening with the most “core” part of the investment.
Especially when the CEO’s qualities represent the biggest portion of that core.

Posted by Paul Weber | Report as abusive

I believe that it is necessary for the CEO of the company to disclose any health issues that require him to take time off of work, just like any other employee. If it’s longer than three days, a doctor note should be required just like any other employee. If I can’t leave work for 4 days because I have the flu without reporting it to my boss along with a doctor note, why should he be allowed to do it simply because he’s Steve Jobs? Is Steve Jobs more valuable than me? He’s certainly richer, but does that mean he’s more important and thus subject to less rules? When my mother had breast cancer she had to bring all kinds of notes and proof just so she wouldn’t lose her job. Her boss had almost as much information on her condition as she did, so why should Jobs get away with just saying “I don’t feel good, I’m going home for 6 months”? The rules should be the same whether you’re the aforementioned factory line worker or the CEO. I am tired of people getting more everything including privacy because they can buy it. Why should Steve Jobs condition be any more private than any other citizen who has a job? I pay my medical fees like he does so why should my boss be more privy to my medical records than Steve Jobs boss? What happened to transparancy? I don’t care if he leaves because he wants his life to be more private. The rules are the rules and Steve Jobs or no steve jobs, you have to follow them.

Posted by Jessica | Report as abusive

Absolutely not. The CEO’s rights to privacy trump the shareholders’ rights’ to knowledge of his medical history. Were a law to be proposed, requiring CEOs to disclose the results of well care doctors visits to the public in the interests of the company’s shareholders, it would be considered to be outrageous. From that point onwards, it becomes difficult to draw the line of privacy and public knowledge. There is scarce a safe ledge upon this slippery slope.

Posted by Hello | Report as abusive

The argument in this piece is that if a company publicly ties its welfare to the strengths of one person, then the health of that person is of material interest to shareholders.

I disagree. I’m certain that shareholders would be interested to know everything about a CEO’s health but I don’t believe that something being of interest necessarily equates to that something being obligatory to reveal.

The fact that something impacts on a CEO’s performance does not automatically make it something that shareholders have a right to know.

If we used “does it effect their performance?” as the litmus test for what a shareholder has a right to know, then where do we draw the line?

* The CEO’s diet? “My CEO needs to cut back on red meat and eat more greens.”
* Their exercise regimen? “The CEO’s only benching 40kilos and only walks 2km twice a week. We need a new exercise program”
* The state of their marriage? You could make an argument that emotionally fulfilled and happy people make better workers – I want my CEO to be a better worker therefore I want him to be happy in his marriage.

All of these factors, and many more, effect performance but they are not of material interest to shareholders.
I think private lives – family, marriage, relationships, health – are private.

Transparency cannot trump personal privacy simply because a person is in more influential position.

Posted by Niall | Report as abusive

Let’s get one thing straight. Apple is a “publicly traded” private company. Just because they publicly trade, does not mean that they have to divulge the results of a cardiogram of the CEO. The SEC currently has no rules requiring disclosure of health status for any corporate officers of a publicly traded company. Anybody knows that one wrong comment made by a company executive can cause the stock value to drop. That is because of how people interpret the comment. People are to damn sensitive and panic at the hint of trouble. Look at how everyone reacted to the World Trade Center terror attack. As soon as news hit the public, people were lining up at the gas stations and buying everything off of the grocery store shelves as if we were encountering an Armegedon. Sheesh!!!

Posted by Parlortrick | Report as abusive