Skip to: Content
Skip to: Site Navigation
Skip to: Search

The New Economy

Jobs's surgery: Did Apple shareholders have a right to know?

By / June 25, 2009

As rumors flew, Apple CEO Steve Jobs made light about his health problems at a presentation in San Francisco in September.

Paul Sakuma/AP/File


The furor surrounding Steve Jobs's secret surgery is not going to go away, despite his excellent prognosis and expected return to Apple in the next few days.

Skip to next paragraph

Recent posts

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.

"I smell the fetid stench of yet another PR move designed to hide the real story about the man and his health," opined columnist Robert X. Cringely in PC World Wednesday. "And that ain't right."

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.

Even at the time, some corporate ethicists said Jobs should disclose more. In a commentary for Reuters, ethicist Dana Radcliffe at Cornell wrote:

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.

Read Comments

View reader comments | Comment on this story