Succession planning…yet again! The Apple Case.

March 18, 2009 at 7:16 pm

I have been following the Steve Jobs’ illness and Apple story ever since it unfolded. There has been much debate about the directors’ culpability in disclosing the severity of his predicament. Should the directors, and Jobs for that matter, have disclosed more details sooner seems to be the major question.

According to former SEC Chairman Harvey Pitt, there is no statute or SEC rule specifically requiring disclosures about executives’ health or personal affairs (for example, stroke, heart attack, drug addiction, alcoholism, divorce, et cetera). Personal information is treated on a one off basis which of course opens the doors to some intersecting deliberations. However, the whole magnitude of this debate is in and of itself fascinating.

I do believe that companies should disclose the serious illness of their CEO. However the fact that it is as great an issue as it is at Apple is the problem and not the mere fact of the illness itself. In other words, shareholders do have a right to know significant details that may impact the CEO’s ability to run the company. On the other hand, if there is a strong senior team in place at the organization and if the CEO has done his or her job, they will have several possible successors groomed to take over for the CEO anyway. In this instance the appointed individuals can almost seamlessly step into to the CEO role, at least temporarily. This can take away the crises nature of the CEO’s infirmity.

As the old adage goes: “it takes a village…” No company’s success should be reliant on one individual as visionary as they may be. If this is observed then disclosure of an illness or other incapacitation will merely be another of the countless and varied details of a company’s operation and not a catastrophe.

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