Are a CEO’s health problems a private matter?
– 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.”
A PRIVATE MATTER
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.
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.