Friday, January 16, 2009

The fiduciary perspective revisited

On Wednesday, before I entered my vow of semi-silence, I wrote a post entitled "From a fiduciary perspective, Jobs' leave of absence is a good thing." However, after I wrote it, I realized that I was probably not as clear as I could have been on my basic point. For the record, this is what I said:

I'm taking Jobs at his word and assuming that when he issued the first statement, he didn't know that his condition was, in his words, "more complex." Based upon the first statement, I'd assume that he isn't going to say any more about why the issues are more complex.

However, by taking the medical leave of absence, all of these issues are moot. Until June, or perhaps longer, Jobs is not involved in the day-to-day operations of Apple, so from a fiduciary perspective the state of his health does not matter. Tim Cook's health is the issue now.

I have been looking at things from the perspective of Apple, and from the perspective of a shareholder of Apple or someone who does business with Apple. If you're looking at it that way, then a corporate official who is unable to perform his duties is of a concern to a shareholder. However, if the official has no duties - which would be the case of someone who is on a medical leave of absence - then, as I said, the issue is "moot."

Mitch Wagner addressed the issue on Thursday. This is what he said:

By taking a leave of absence as CEO, Jobs has made his health a private matter....

Apple and Jobs have already done the right thing by investors, when Jobs stepped aside....

When Steve Jobs stepped aside yesterday, he gained the right to tell busybodies to buzz off when they wanted to pry into his medical condition. He became a celebrity. Until he returns to pick up the reins at Apple once again, he'll stay that way.

This is why Wagner writes for InformationWeek, and I write for...well, mrontemp.

And why Patricia Resende writes for CRM Daily:

So what does a company built around the iconic Jobs do? Does it take a very personal health situation and make it everyone's business? Or does it guard the man who built Apple and upset investors?

"At the end of the day, the board has the responsibility to Apple employees and Apple shareholders and will have to constantly balance between what are their fiduciary responsibilities vs Steve's right to privacy," said Michael Gartenberg, vice president for mobile strategy at Jupitermedia. "My guess is along with the board and Apple's general counsel, they will figure out all of those things."...

Apple's board has stood by Jobs and hasn't bowed to pressure from investors to outline a succession plan. But if the board decides Jobs is irritating investors, it could push him out again like it did in the mid-1980s....

"What people should probably remember when they think about Apple is that there is a lot more to Apple than just one individual," Gartenberg said.

Apple has more than 24,000 employees and Cook must run day-to-day operations in Jobs' absence. He previously ran the company in 2004 when Jobs underwent pancreatic surgery.

On the other side, it should be noted that Mitch Wagner was responding to Joe Nocera.

The most indispensable chief executive in the United States, beloved by customers and investors for his magnificent turnaround of the company he founded — and for the amazing gadgets his company produces — can no longer be trusted on the subject of whether he is healthy enough to continue running the company. Although Mr. Jobs says he will return in June, Mr. [Charlie] Wolf [at Needham & Company] wrote in his note that investors were likely to “assume the worst — at the extreme, the possibility that Mr. Jobs will never return to Apple as full-time C.E.O.”...

There are certain people who simply don’t have the same privacy rights as others, whether they like it or not. Presidents. Celebrities. Sports figures. And, at least in terms of his health, Steve Jobs. His health has become a material fact for Apple shareholders. His vagueness about his health, his dissembling, his constantly changing story line — it is simply not an appropriate way to act when you are the most important person at one of the most high-profile companies in America....

The time has come for Apple’s board to take control of this subject from Mr. Jobs and do the right thing by the company’s investors. Tell us, once and for all, what is going on with Mr. Jobs’s health. Put the subject to rest. End the constant rumor-mongering.

Actually, I have to admit that there is a valid point in there. While Jobs is not involved in day-to-day operations now, it is possible that investors and others may rely on one particular statement Apple made in its announcement. Let's re-examine it:

I have decided to take a medical leave of absence until the end of June.

Now I guess it's theoretically possible that an investor could interpret that statement to mean that Jobs is absolutely, positively going to come back to Apple on July 1, 2009.

However, would a reasonable investor assume this?

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