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Investors are asking – and regulators may well be examining closely – why the serious health condition of America's (arguably) most iconic chief executive was kept secret. Shareholders have the right to know things that materially affect the value of a company. Doesn't a life-threatening disease count?
Or is there such a thing as too much transparency? A related question: Does it matter that Mr. Jobs is not merely the leader of a corporate team but embodies a company in ways that few other CEOs do?
Criticism on the rise
There's little guidance from federal regulators on the subject, so the legal, medical, and ethical debates can continue unabated. So far, Jobs's critics have been far more vocal than his supporters.
Even legendary investor Warren Buffett has weighed in, saying Jobs should have divulged his condition. “Whether he is facing serious surgery or not is a material fact,” he told CNBC Wednesday. Material facts, according to federal rules, must be disclosed to shareholders.
A CEO's rights?
But wait! Doesn't everyone, even a CEO, have some right to privacy about their medical situation? And it's not as if Jobs or Apple kept it all secret. On Jan. 5, after lots of speculation about his dramatic weight loss, he released a statement saying his doctors believed he had "a hormone imbalance" and that he was following a "relatively simple and straightforward" treatment for a "nutritional problem."
On Jan. 14, he followed up with an e-mail to Apple employees (which Apple made public) saying he had learned in the past week that the health issues were "more complex than I originally thought" and that he was taking a medical leave of absence until the end of June, remaining as CEO but leaving Apple's chief operation officer in charge of day to day operations.
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.... 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.