I didn’t run during the week I was in Dublin. I planned to hit the pavement at least once, most likely New Year’s Day. I was staying at the Shelbourne directly across from St. Stephen’s Green. Once around equalled about 1.25 miles. So do that four or five times. Ah, nah. Maybe it was the Guinness. Or the double Jameson before bedtime. Or the fact that they drive on the wrong side of the road. Oh, well. I’m back. And I had a great run this morning.
And I was thinking about one of the themes that I’ve written about many times here: timely, honest disclosure. I’m convinced that this is a key to restoring confidence and trust in business and government. And I’m equally convinced that it will require a renewed ethic of responsibility on the part of leaders throughout the public and private sectors to make it happen.
So I was intrigued yesterday by the disclosure from Steve Jobs that his very noticeable weight loss was due to a “hormone imbalance.” This, of course, is not a new story. Jobs several years ago was diagnosed with pancreatic cancer. He now says he is cancer free. Still, the health concerns involving the CEO of Apple — and the probable link to the decline in Apple’s stock price and valuation — has been well reported and debated for months.
So two questions. Did Jobs disclose enough? And what took him so long?
And exploring those questions could fill up a week’s worth of discussion in an ethics class. Here you clearly have what ethics guru Rushworth Kidder would define as a right versus right dilemma. On the one hand, Jobs’ right to privacy. On the other, his obligation to Apple and its shareholders.
And the law and corporate governance requirements relative to disclosure are murky. So in my mind at least it comes down to ethics — and responsibility. Here’s from a Business Week online article:
Securities laws require that publicly traded companies disclose facts that are “material,” but arguments rage over what constitutes material, Grundfest said. “Suppose Jobs were losing weight and it didn’t interfere with doing his job, but he didn’t know why he was losing weight,” he says. “What’s the board of directors to do? Say that the CEO is losing weight and it doesn’t know why?”
Strictly speaking, Jobs isn’t required to disclose much. The rules on disclosure of a key executive’s illness, while arguably material information as far as investors are concerned, are weighed against privacy laws and standards. Various CEOs have acted differently over the years. When then-Intel (INTC) CEO Andy Grove was diagnosed with prostate cancer in 1995, the company didn’t immediately disclose the fact, but Grove did so the following year by writing an article for Fortune magazine about his experience combating the disease. When Warren Buffett, CEO of Berkshire Hathaway (BRKA), underwent surgery to remove benign polyps from his colon in 1997, he chose to disclose the circumstances to his investors and release details of his succession plan.
I know from experience that this is a tough call for Jobs and for his senior PR people — if they are in any way involved in the decision making. Still, I believe we have to keep prodding business and government leaders to disclosure more and more — and in a timely and honest manner. This ethic of responsibility falls to them.
By the way, as I mentioned a few weeks ago, I have a hormone imbalance. It involves my thyroid. Still not sure about Steve Jobs and his “hormone imbalance.” Oh well. It’s a start.