What’s next for Apple’s board?

October 6, 2011

By Lucy P. Marcus
The views expressed are her own.

With the passing of Steve Jobs, what role should Apple’s board play in keeping up the momentum of innovation, building shareholder value, and not simply meeting the market but creating it?

For so long, Steve Jobs has loomed large in Apple’s success. In his dual role as both CEO and Chair of Apple’s board, he has controlled and shaped Apple’s destiny, infusing the company with his personality and drive for innovation, as well as his unrivalled and uncanny understanding of what Apple’s customers wanted today, and more importantly, what they will want tomorrow. On the flip side, the Apple board and its directors have not played a strong role in steering the company or holding its executive team to account. Investors have grumbled, but it has been hard for them to argue with the results.

With Steve Job’s passing, attention will turn to the role the Apple board of directors will play from now on. There is an enormous amount of pressure on Tim Cook, and on the board, as the world watches to see if they have what it takes to move the company forward. Investors and stakeholders will be monitoring Apple very carefully to see if this board and the executive team are up to the task of sustaining and growing Apple, especially at a time when other high profile tech company boards, such as Yahoo and HP, have been publicly displayed as not up to the task. There is also the added pressure of running the second highest-valued publicly traded company in America.

What can the board do to reassure investors, customers, partners, and employees?

Support their CEO:

Following an icon is a tough job, and Tim Cook is going to need all the support and engagement his board can muster. With mixed reviews on Tuesday’s  iPhone announcement, and shares down as a result, Apple has a lot to prove. The next big flex point comes up on October 18th when Apple releases its earnings. That will be Apple’s chance to talk about its plans for the future.

Tim Cook was handpicked and groomed by Steve Jobs. He has had some time to get a feel for the job and he knows the organization well and the organization knows him. Still, Cook will need the support of his board, both in backing him up, but also in challenging him in constructive ways to make sure he is operating at his best and making the right decisions for the short term and long term health of the company.

Look around the board table:

Holding the roles of both CEO and chair of the company, Steve Jobs has had ultimate control over his board and company for a good many years. The board will now need to assess whether they have the skills and abilities they need to adjust to the new reality and to future proof their company. The Apple board will need to look to its structure and composition and make sure they have the diversity of experience, skill and opinion that they need. For example, as the company is ambitious for more international growth, the board will need to make sure it has the international experience it needs to assist that growth.

There is also the matter of the chair. The market will rightly balk at Tim Cook taking on the same dual role, so some speedy decisions will need to be made about who will take up this role.

Ask the tough questions:

The greatest service the Apple board can give is to ask the tough questions of the executive team and of one another. Asking questions in the relative safety of the board room, and judging the veracity of answers there, is a lot better than staying silent and finding out that things are not right in the cold hard world. They will also need to be sure that they are looking at the balance of grounding and stargazing issues, making sure the company fulfills all its legal requirements, manages risks properly and does business in a responsible way, while at the same time striving to achieve more and stretch itself to continue to be a robust and resilient business that is capable of responding effectively to the unknowns in its future.

Be transparent & visible:

Now is the not the time for the board to go into hiding. They need to be seen doing the right thing so that all stakeholders know that each and every board member is fully engaged and keeps close to the organization to monitor the health and development of Apple as the company goes through what could be a painful transition. Under Steve Jobs, investors often felt the board was not playing a real role in the company, but they will be less tolerant of that in the future.

Apple’s board of directors now need to make their presence felt individually and collectively. They all have busy lives elsewhere, but now is the time when they can prove to themselves and the world that they are committed to, and capable of, helping Apple make the transition it needs to make.

PHOTO: An Apple logo is seen with its light switched off to mourn the death of former Apple Inc CEO Steve Jobs, at an Apple store in Tokyo October 6, 2011. REUTERS/Yuriko Nakao


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As soon as you speak of a board of directors directing a company of Apple’s size, you speak of risk aversion. Translated: the drive for radical innovation is lost in a crowd of accountants and lawyers. Radical innovation is a maverick, unafraid of change.

Posted by OFA7 | Report as abusive

No advisory board ever did anything amazing. It takes people who actually know what they’re doing – hopefully that will be Tim Cook and Jonathan Ive – to make things happen. Best thing for Apple’s board to do is keep quiet like they always have and let the company’s culture be maintained by the people who know the company best – the people who already work there.

Posted by Nullcorp | Report as abusive

I think whilst Steve Jobs has been exceptional he has not given anything that could and still is being done elsewhere in the market.
adoration is a cloud which needs to be cleared I feel any good graduate in product design given the right financial backing would have done equally as well
What is lacking in the general market is a vision that needs to be addressed Design not money is the key
His success was that he managed to pull it off like any good bandit a good hold up brought results

Posted by climbingk2 | Report as abusive

Steve Jobs was “extraordinary”. He made Apple an “extraordinary” company that has had an “extraordinary” impact on all stakeholders. With his passing, it is highly unlikely that Apple will continue to be an “extraordinary” company, regardless of its new leadership.

To reflect this reality, Apple’s brand to its investors (its risk/return promise) needs to change. If Apple’s leaders do not explicitly acknowledge this they will be out of integrity and will suffer a loss of investor trust and confidence (not to mention customers and all other stakeholders). For this reason (if not also for the more likely reason of the impending passing of its leader), it is perhaps appropriate that last week’s iPhone product announcement was less ambitions than the market had expected.

The best board for an “extraordinary” leader is different from the best board for an “excellent” leader. Apple will need to adopt a new corporate governance system to support the unavoidable reality of a modified risk/return value proposition. If it fails to align its board structure and practices with redefined strategic priorities, it will fall short of delivering “excellent” performance.

The reality is that the Apple of the future will need to take fewer risks and deliver less value. The real danger is that its leaders will delude themselves into believing they have learned all they need to know to successfully continue business as usual.

This is where strong leadership from a sufficiently empowered governance committee can make all the difference. The process begins with the govenance committee accepting the unfortunate reality that it is highly unlikely that Apple will ever again be an “extraordinary” company, but that the board can play a critical role in ensuring that it continues to create “excellent” value for the long term.

Posted by TrustEnabler | Report as abusive

People are missing the point. Steve Jobs explained this many times. Apple’s competitive edge is not the iPad or iPhone or iPod. Apple’s competitive edge is that Apple produces the whole show.

Right now you can go the Apple way or the Google way. Google designed Droid software, Motorola built the phone, Microsoft provides the computer software and so on and so on. It is a massive competitive edge for Apple that it does the whole thing. Now they have iCloud, so the system is almost complete so all they have to do now is keep slowly ramping it up until they take over the world.

Believe me, I had a Droid and now i have an iPhone. The experience is not the same. All Apple has to do to win everything is keep their heads and not panic. Just keep to the task. Despite Jobs’ reputation as a detail guy, his biggest asset is that he was a big picture kind of guy. I have no doubt the senior people at Apple all know where they’re headed.

Posted by RobertT | Report as abusive