Apple made a big announcement today: the sales of the new iPhone are very strong. CEO Steve Jobs, who has been on leave for health-related reasons, is quoted in the press release, but nothing is said about his reported liver transplant, the state of his health, or what either means for the company. I discussed this topic on CNBC yesterday. Watch it here.
Any CEO of a public company relinquishes the luxury of privacy when it comes to health issues. But too often, candor has been lost in politeness and boards as well as constituencies like employees and investors have been surprised by the sudden deaths of CEOs at companies like Coca-Cola, McDonald's, and Beatrice Foods. The issue is presented even more clearly at a company like Apple, where founder-CEO Steve Jobs is treated as the company's foremost asset, its brand, the all-around embodiment of the company that revolutionized personal technology and product design. Steve Jobs is not just Apple's CEO; he is its Betty Crocker, its Mickey Mouse, its Tony the Tiger, except for one small difference -- he is a human being. He introduces its key products himself, all but pulling them from a hat like a magician. And it is well known in the community of passionately devoted consumers that he is personally involved in making product decisions. "Steve doesn't like buttons," and therefore the iPhone has almost none.
Making a human being the company's symbol has its upside in helping the consumers identify very personally with the company and its products, but it has a downside when it comes to the natural vulnerability that is a part of the human condition, even for the super-talented and super-wealthy. The Apple board, which failed in tying Jobs' pay to performance, failed to prevent him from backdating his options, and failed to acknowledge the damage and culpability of the options that were backdated, has now failed again in its fumbled communication about the state of Jobs' health.
Shareholders and other constituents deserve to know how serious Jobs' health problems are and what impact his illness and recovery will have on the company's strategy and operations. They also deserve to know what the company's back-up plans are, not necessarily who has been designated his successor but who is going to decide that and what the procedures and criteria will be and how far along they are. Most important, they deserve to hear all of that from the board, communication that is essential in form as well as content for assuring investors, employees, customers, and suppliers that despite their past focus on Jobs as the personification of the brand, they have the back bench, the courage, and the understanding of their responsibility as directors to take the lead in determining the company's direction, keeping constituents informed, and, when he is reluctant, reminding Jobs that his announcements have to be as forthcoming about his own status as they are about the company's products and prospects.
Nell Minow — Editor
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