Wednesday, January 14, 2009

From a fiduciary perspective, Jobs' leave of absence is a good thing

I argue that Steve Jobs' medical leave of absence from Apple is actually a good thing, from a fiduciary perspective.

But first, let's catch up.

As it happened, the first announcement that I saw was in the Inquisitr (solely because it came up first in my feed). I subsequently saw posts from Robert Scoble and Dan Frommer of Silicon Alley Insider.

In these initial reports, people pretty much presented the Apple Media advisory:

January 14, 2009
Apple Media Advisory

Apple CEO Steve Jobs today sent the following email to all Apple employees:


I am sure all of you saw my letter last week sharing something very personal with the Apple community. Unfortunately, the curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well. In addition, during the past week I have learned that my health-related issues are more complex than I originally thought.

In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.

I have asked Tim Cook to be responsible for Apple’s day to day operations, and I know he and the rest of the executive management team will do a great job. As CEO, I plan to remain involved in major strategic decisions while I am out. Our board of directors fully supports this plan.

I look forward to seeing all of you this summer.


Press Contacts:
Steve Dowling

Katie Cotton
(408) 974-7269

I figured that it was appropriate to revisit my January 5 post and see if I still agreed with whatever garbage I spouted at that time. (I'm older and wiser now, I figure.) This is what I said at the time:

Apple did have an obligation to share what it knew about Jobs' health, even if it didn't know everything at the time. And, at the very latest, that information should have been shared when the Macworld speaker choice was revealed....

I believe that anything that affects one's ability to be a corporate officer should be addressed in some way. At the very minimum, the company should acknowledge that the executive in question is undergoing a personal matter, but is still able to perform corporate duties.

Well, it now turns out that Jobs is unable to perform corporate duties. He cited two reasons:

  • "[T]he curiosity over my personal health continues to be a distraction not only for me and my family, but everyone else at Apple as well."

  • "[D]uring the past week I have learned that my health-related issues are more complex than I originally thought."
Frankly, the first reason is a non-reason. If people thought that the curiosity was a distraction after Jobs' announcement earlier this year, that distraction isn't going to go away because of the second announcement. And the family won't be spared either; I'd be willing to be that reporters disguised as yogurt salespeople are lining up outside Jobs' home right now.

Regarding the second reason, 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.

P.S. I'll grant that an argument can be made, and has been made, that Jobs is the corporate face of Apple, and in that respect his absence affects Apple's long-term prospects. In one of those weird coincidences, Mitch Wagner wrote about Steve Jobs' health a few hours before the latest announcement. This is what he said on the topic of Jobs as the public face of Apple:

Is Jobs' health anyone's business? Jupiter Research analyst Michael Gartenberg, and other Apple defenders, say no, it's a private matter. I disagree. Jobs' health is relevant as long as he has chosen to make himself a public figure. He is the face and spokesman for Apple, credited with its current success, and the company has no visible plan for succession. Investors identify Apple's success with Jobs, and they're afraid every time they think Jobs might become incapable of running the company. We see those fears when Apple's stock drops every time Jobs sneezes or stubs a toe....

Jobs isn't just any CEO of any public company. Jobs has chosen to make himself the public face of Apple. He has worked to build a mystique around Apple, and focused that mystique on himself as its charismatic leader.

Ironically, with the announcement that Apple made a few hours later, the "visible plan for succession" issue has been addressed, after a fashion...

P.P.S. Regarding whether or not Jobs' presence at Apple is critical to its future, please see my responses to posts by Louis Gray and Robert Scoble.

P.P.P.S. Dan Frommer, again:

Apple...has a deep, talented executive bench, including COO Tim Cook...; marketing head Phil Schiller...; design guru Jonathan Ive; and iPhone software head Scott Forstall. This won't change before June.

But Apple will gradually lose its lead -- especially if it doesn't quickly put in place a plan to move forward without Steve. Pundits will argue all day that Apple is more than Steve Jobs. Fine. But Steve Jobs is Apple.

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