Steve Jobs' Hormonal Imbalance Points to Bigger Problem


This morning, Steve Jobs released a memo indicating that he was suffering from a hormonal imbalance, with the implication that he likely would not be seen in public until he was able to regain his body mass. Yet the cause of the imbalance is not discussed (it is a common side effect of pancreatic cancer and there are apparently a number of studies looking at this link). Jobs had surgery for pancreatic cancer nine months after he was diagnosed, after the alternative medicine approach he had taken failed to work.


Jobs' Health Is a Symptom of a Bigger Problem


Jobs is a strong believer in alternative medicine and he likely truly believes the treatment he is receiving will eliminate the health problem, whatever it is. But the point is, like the fact that the "hormonal imbalance" is a symptom of a bigger problem, this focus on Jobs' health is a symptom of a board of directors not doing its job.


The issue isn't whether Jobs' health should be a private matter; the issue is how irreplaceable Jobs is to Apple. People die, often suddenly, and a large number of people believe that Apple's success, perhaps even its life, is tied to Jobs'. It remains the duty of the Apple board of directors to assure the continuance of Apple, yet the board seems more intent on covering up any risk that might force Apple's CEO to depart.


Board Fiduciary Responsibility and Insider Trading Risk


Once a board acts to actively cover up or conceal information that is material to the survival of the company, particularly information that can't be contained within the company, like the medical condition of a CEO (doctors, nurses, family members all have parts of this information), you have a severe problem related to insider trading that increases the risks being taken by Apple and its board.


It certainly can be understood that, after once being fired, Jobs wants to keep his CEO job as long as possible, and it isn't uncommon for a board to support even a CEO with substantially less of a hold than Jobs has on Apple in this goal. But it also often showcases an upside-down relationship between a company's board and its CEO. The CEO should report to the board, not the other way around. When this kind of problem happens, whether it is Enron or Apple, bad decisions often result.


The Unheeded Warning


The warning was the stock option post-dating problem that virtually every CEO other than Jobs lost their position, and often freedom, over. This latest is simply another reminder that Apple desperately needs a replacement for Jobs, not just to run the company, but to be the human face of it. That person could be trained, much like Jobs himself was trained, to be that face, but it will take (depending on initial skill set) between six months and three years to do it.


Until this is done, Jobs' health isn't private because Apple is a public company, and his health is simply too critical (valued by some at up to $20 billion) to the company's survival. If Apple fails because of Jobs' eventual departure, it will be the board's fault. The continued failure to either fix the problem or adequately disclose it should have us all looking at every other company or political effort that this board is involved in and questioning whether they are adequately disclosing critical information in those roles as well.


Wrapping Up


Regardless of his board's inaction, if Jobs truly wants the company to survive him, he needs to mentor someone, ideally several someones, to be able to step into the full set of duties he currently has at his level. People are mortal, corporations aren't, yet Apple appears to be tied to Jobs' mortality. There is no more important job for Jobs or Apple's board than fixing this problem.