Case 3-8
Disclosure of Steve Jobs’ Health as Apple CEO: A Public or Private
Matter?
An important issue within the scope of corporate governance is whether a company should disclose the
health problems of its CEO and how much information should be disclosed. The sensitivity of this issue is
exemplified at Apple Inc., where CEO Steve Jobs had faced numerous questions regarding his health and
the impact that a sudden departure would have on the company.
In October 2003, Jobs was diagnosed with pancreatic cancer. No public announcement was made, although
the board of directors was notified of his condition. The specific form of cancer was rare but considered
treatable, with the majority of patients who undergo surgery experiencing a survival rate of more than ten
years. On July 31, 2004, Jobs entered Stanford Hospital for treatment.
The following day, Jobs sent an email to Apple employees stating that, “This weekend I underwent a
successful surgery to remove a cancerous tumor from my pancreas….I will be recuperating during the
month of August, and expect to return to work in September. While I’m out, I’ve asked Tim Cook
[executive vice president of sales and operations] to be responsible for Apple’s day to day operations, so we
shouldn’t miss a beat.” A copy of the message was distributed to the Associated Press. It was the first public
disclosure of his condition. Given Jobs’ strategic and visionary role at Apple, it is perhaps not surprising
that when trading resumed the next day, Apple stock fell 2.4 percent.
The issue of Jobs’ health resurfaced in June 2008, when he appeared noticeably thin at a public appearance.
A company spokeswoman responded to inquiries by stating that Jobs had “a common bug…He’s been on
antibiotics and getting better day by day and didn’t want to miss [the event]. That’s all there is to it.” When
analysts asked for more information during an earnings conference call, Apple CFO Peter Oppenheimer
declined to elaborate: “Steve loves Apple. He serves as the CEO at the pleasure of Apple’s board and has
no plans to leave Apple. Steve’s health is a private matter.”
In January 2009, Apple released another letter from Jobs in which he explained that his recent weight loss
was due to a “hormone imbalance.” According to the letter, “The remedy for this nutritional problem is
relatively simple and straightforward, and I’ve already begun treatment…I will continue as Apple’s CEO
during my recovery.” Concurrently, the board of directors issued a statement that, “[Jobs] deserves our
complete and unwavering support during his recuperation. He most certainly has that from Apple and its
Board.”
However, the company announced 10 days later that Jobs would take another leave of absence. According
to Jobs, “during the past week I have learned that my health-related issues are more complex than I
originally thought. In order to take myself out of the limelight and focus on my health…I have decided to
take a medical leave of absence until the end of June.” No elaboration was offered. Tim Cook, then chief
operating officer, would resume leadership of the company. In the two-week period surrounding these
announcements, Apple stock fell 17 percent.
Jobs returned to work as scheduled six months later. Two weeks prior to his return, however, news leaked
that Jobs had received a liver transplant at a Tennessee hospital the previous April. A company
spokeswoman declined to comment other than to say, “Steve continues to look forward to returning at the
end of June, and there’s nothing further to say.” Doctors unaffiliated with the case explained that tumors
associated with the pancreatic cancer that Jobs was originally diagnosed with often metastasize in another
organ, commonly the liver. The hospital where Jobs received the transplant stated that his prognosis was
“excellent.”
In January 2011, Jobs took a third leave of absence. In an email to employees, he explained that he would
“continue as CEO and be involved in major strategic decisions” but that Tim Cook would be responsible
for “day to day operations.” Jobs would be back with the company “as soon as he could. In the meantime,
my family and I would deeply appreciate respect for our privacy.” When asked for additional comment, an
Apple spokeswoman replied, “We’ve said all we’re going to say.” Jobs died October 5 of that year due to
complications from pancreatic cancer that led to respiratory arrest.
Questions
1. Were the shareholders of Apple entitled to receive information about the health of Jobs?
What about the general public? Of what value is such information? How might the company
benefit from the disclosure of such information and how might it suffer? How might the
shareholders benefit and how might they suffer?
From a legal point of view, the company has a duty to disclose information that is “material”—i.e., facts a
reasonable investor would need to know in order to make an informed decision about whether to buy or sell
the company’s stock. The question becomes whether the health of Steve Jobs was material. But, from an
In general, the company has an ethical obligation to alert investors—and other stakeholders—to serious
risks to the company’s health. Because Apple and its CEO had actively encouraged “the Apple
community” to associate the company’s success with Jobs’ leadership, they had an obligation as well to
The following explains why Jobs’ right to privacy is not absolute and why the right thing for him to do was
to reveal details about his medical condition that are relevant to his leadership abilities.
1. Role-specific duties exist. People have ethical obligations by virtue of the positions hold. These
obligations don’t necessarily apply to others. For example, physicians have a role-specific duty to
2. The CEO of a public company has role-specific duties to stakeholders. When an individual
creates a company from scratch —as Steve Jobs did—or steps into the top position, leadership
brings with it responsibilities as well as perks. The perks are obvious: a hefty salary, influence in
Jobs’ medical condition, his treatment options, and his prognosis all fell within the rightful purview of
stakeholders. Celebrity alone should not carry with it public access to the intimate, intensely personal
2. From a corporate governance perspective, what issues are important in determining whether
there should be disclosure of the health problems of a CEO? Is it an ethical matter?
From a corporate governance perspective, the company must have a succession and training plan in place
so the day-to-day operations can continue, no matter what happens to the CEO. Are health concerns any
different from a company preparing for the retirement of a CEO? The company should plan, whether short-
Corporate governance considerations include a change at the top management level and replacing Jobs with
An example of cultural shift came in September 20123, when Jobs’ replacement, Tim Cook, made an abject
apology for the quality of the maps service on the new iPhone operating system. With 100 million people
using it within just a week, the criticisms about errors – in locations, naming, or omissions – were
3. Should information about the health of other senior managers be disclosed such as the five
most highly compensated senior managers or the vice chair of the board of directors? Should
other information be disclosed about the CEO of a public company such as being involved in
a contentious divorce that distracts from day-to-day management of the company?
In general, the company has an ethical obligation to alert investors—and other stakeholders—to serious
risks to the company’s health, whether financial, health of top management, or the industry. A contentious
divorce can disclose information about a company and may distract a manager from the day-to-day