Steve Jobs, Medical Privacy, and Apple Shareholders
In the past few weeks, people have been focusing on Steve Jobs’s health. Jobs isn’t just the CEO of Apple; to many, Jobs and Apple are inextricably tied. Which partly explains why, after the recent announcement that Jobs would be taking “a medical leave of absence until the end of June,” Apple stock plummeted. The announcement came a few days after Jobs had released an open letter stating that, he had a hormone imbalance, its remedy “is relatively simple and straightforward,” and “I will continue as Apple’s CEO during my recovery.” (Background: Jobs had pancreatic cancer in 2004, kept it secret for several months, and sought treatment. Rumors about Jobs’s health have dogged him since then.)
Now comes news that the Securities & Exchange Commission will investigate whether Apple and Jobs committed securities fraud by either misleading investors (with the two differing announcements) or by withholding material information from them. This has launched a huge debate about what rights belong to Jobs and to Apple investors.
Personally, I believe that Jobs has the obligation to tell Apple investors if his health would force him to step aside from his duties as CEO. He has done this, taking a temporary leave. If he decides to permanently retire from Apple (for his health or any other reason), then investors have the right to know this information. I do not believe that he is obligated to give further details about his medical condition. It is his life; it is his body; it is his right to decide whom to tell and when.
Here are other responses to the SEC investigation into Jobs’ health:
An opinion column at the Wall Street Journal: His health was surely material information for investors. And under federal securities laws, it is a serious felony — securities fraud — for corporate officials to disseminate false material information, or to fail to disclose true material information related to the company’s financial prospects. But while the legal meaning of “materiality” has long been the subject of dispute and little regulatory definition, it should not dictate that corporate officers have no right to any privacy.
Laura P. Hartman, a professor of business ethics at Chicago’s DePaul University, in the Toronto Star: ”Privacy is most often defined in two ways – both the right to be left alone as well as the right to control what information people know about you,” explains Hartman. And while any individual has a right to both aspects, famous people choose to forfeit that, to some extent. [...] If there’s news in hand “that can affect whether a reasonable investor would buy or sell … then it must be disclosed” according to U.S. securities law, Hartman says. “The fact Jobs stepped down makes it unquestionable that it’s material … it impacted his ability to serve.”
An opinion column at Forbes: We have come to expect to be notified of material questions about a President’s health, because the stakes are so high. Should we not expect the same from our top executives? The experience at Apple shows how impossible it is, in the end, to keep private the health of a charismatic CEO strongly identified with his company. But charismatic or not, every CEO and C-Suite executive is vulnerable to similar circumstances, I believe.
A column in the New York Times: It is really hard to write about Steve Jobs and his health problems. [...] Mr. Jobs also believes strongly that it’s nobody’s business except his and his family’s. But he’s wrong. 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. Once again, his health is a material fact for Apple’s shareholders, and more disclosure is required. 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 prominent companies in the country. On the contrary: it is infuriating.
American Journal of Bioethics blog post in response to the above New York Times column: Some have argued that Mr. Jobs and Apple have played with Apple’s stock prices through multiple health disclosures over the last 6 to 8 months. This, if it were true, would be unethical as well and an unjustifiable use of health information. I say: let’s leave the beloved Steve Jobs alone to recover in peace and quiet and stop demanding of him what we would not ask of our friends and neighbors–to disclose the intimate details of one’s illness in one of the most trying times in a person’s life.
ZDNet column: I don’t know which is more important – Steve Jobs’ right to privacy or the public’s right to know. If it were someone in my family, I’d want everyone to leave us alone and let us deal with it. But as a career journalist, I’ve been trained to drill in for detail and to always ask follow-up questions to give readers what they really want - the details.
Ars Technica: While companies do have to disclose things like how much executives make, there’s no explicit requirement to disclose health information. If the SEC does uncover evidence of wrongdoing, a high-profile case like this could cause it to add new health disclosure requirements, although a move like that is fairly unlikely.
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