Why Steve Jobs wasn't obligated to make his health a public matter

Why Steve Jobs wasn't required to make his health condition a public matter

When Steve Jobs recently announced that he would be taking a leave of absence from Apple, a number of critics began shouting that Apple and Steve Jobs haven't been completely forthright in regards to his health.  Some have even suggested that Apple's board deliberately withheld relevant and material information from the public so as not to affect Apple's stock price.  It's important, though, to move beyond the chirping of tech pundits and actually examine the extent of any legal obligations, if any, that Steve Jobs and Apple had to keep the public abreast of his health. Securities Law doesn't provide an explicit rule requiring executives to reveal their health to the public at large, but an executives health can appropriately become subject to public inquiry if the information would be of interest to a reasonable investor, and if that ailment affects that executive's ability to carry out his/her job duties.

The health of Steve Jobs is clearly of interest to Apple shareholders, but that doesn't mean every time Steve Jobs stubs his toe or gets the flu that Apple needs to issue a press release.  In this case, though, the situation is a lot more serious, and Steve Jobs' health condition, whatever it may be, is obviously affecting his ability to run Apple, as evidenced by his decision to take a leave of absence.

Some journalists, however, claim that Steve Jobs and Apple's board of directors privately knew the severity of Jobs' health condition, but purposefully withheld that information from the public for weeks.  Some are even speculating that shareholder lawsuits are inevitable as a result.   Allegations of misconduct, however, will be tough, if not impossible to prove. 

First of all, we have no way of knowing what information Apple's board of directors were privy to, so arguments that the board misled investors are premature at best.  More importantly, though Steve Jobs lost a significant amount of weight in a relatively short period of time, there's no evidence to suggest that Jobs knew what was causing his weight loss.  In fact, based on the information we have, it seems that even Jobs' doctors weren't able to pin down the cause of his rapid weight loss.  In such a scenario, what else could Jobs and Apple executives comment on the matter except to say that everything was fine?

When Steve Jobs first informed the public about his hormonal imbalance, he noted that his weight loss had been a "mystery to me and my doctors."  Jobs then goes on to state that after further testing, his doctors "think they found the cause."  If the doctors caring for Jobs weren't even able to diagnose his condition, what information could he himself have been able to disclose to the Apple board or to the public?  Was he supposed to come out and say, "Hey guys, I realize I've been losing weight but the doctors aren't quite sure why yet"? 

Now, one might ask, "But what if the doctors diagnosed him with a hormonal imbalance 9 weeks ago?  And what if the board of directors were aware of this?  Aren't they under a duty to disclose then?" 

Not necessarily. 

A duty to disclose would only arise if his condition would materially affect his ability to fulfill his duties as CEO.  That said, Jobs noted in his initial letter that "The remedy for this nutritional problem is relatively simple and straightforward."  If we take Jobs at his word, and unless you're a doctor I don't know how you can't, Jobs and Apple's board of directors were under no obligation to keep the public abreast of Jobs' health since it appears that Jobs, and by extension the board, were under the impression that his condition was easily curable and would not affect his ability to function as Apple's CEO.

One week after his initial letter, Jobs wrote that he was going to take a leave of absence from Apple because he learned earlier that same week that his "health-related issues are more complex" than he originally thought.  Given how long it took his doctors to initially track down the root cause of his weight loss, it's completely plausible that his health condition was indeed a "moving target", as some have noted.

Yet because Job's condition got worse so quickly, people are accusing Jobs and Apple of some massive and purposeful mis-information campaign intended to fool the public.  Unless Jobs lied about what his doctors told him, how could he and Apple's board realistically be held accountable?  It's mind boggling that pundits are lambasting Apple and Jobs for not being more forthcoming about his health condition when even the doctors taking care of Jobs weren't able to figure out what the problem was until just recently.

The bottom line is that Steve Jobs loves working at Apple, yet has decided he needs to take some time off to tend to a serious health condition.  There is no evidence to suggest that Jobs was ill-equipped to run Apple over the past few weeks, and as such, people should let the man recover in peace.

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