If the CEO of a public company is sick, does the board have to tell the world? How sick? Life-threatening? Enough to keep the person out of work for an extended period?
McDonald's (MCD) faced the issue several years ago. Its new CEO at the time developed cancer and eventually died. MCD named a temporary chief executive and told the world.
There has been a troubling suspicion that Apple (NASDAQ: AAPL) has not been forthcoming enough about the health of its CEO, Steve Jobs. He was O.K., and then he was not. The board probably knew that all was not well. It decided to keep that to itself. But maybe the board grew restless and asked Jobs to take some time off. (See pictures of Jobs.)
Whatever the discussions were behind the door of the Apple boardroom, the Securities and Exchange Commission has decided that it wants to know how the decisions surrounding the Jobs disclosure were made.
According to Bloomberg, "U.S. regulators are examining Apple Inc.'s disclosures about Chief Executive Officer Steve Jobs's health problems to ensure investors weren't misled."
The investigation may be unpleasant and may get into minutes of board meetings and e-mails and phone calls among board members. Did they have a fiduciary duty to public shareholders to disclose the issues with Jobs' health? They certainly knew about them long before the outside world did.
The examination of the board's activities may take some time and may set a precedent for how executives' health issues get disclosed. And it will certainly spark a wide debate about whether Apple did the right thing.
Douglas A. McIntyre
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