CEO health issues a hot topic
CEOs are often integral parts of a company’s brand. Forces that threaten to harm the CEO also can damage a company’s bottom line.
That’s the case with Apple and Steve Jobs, who is trying to protect his privacy while shareholders, customers, and the media speculate about what his health-related issues could mean for the future of the company. CEO health is one of those rare battles where important laws – rights of individuals to protect personal health information and rights of shareholders to protect their investments – are at play on each side.
At some point, a court will be forced to make a decision about which set of laws are more important. Until that time, we can only examine the prevailing forces.
The first set of forces is regulation. No rules specifically address CEO health, but two principles apply:
- If a company discusses a CEO’s health issues, its disclosures must be “full and accurate.”
- A company must disclose each quarter “any known risk, event, trend or uncertainty” that could affect “future results of operations.”
Every company will have to decide for itself what information is necessary to meet this regulation.
The second set of forces is confidence. Companies sometimes live and die by the confidence others place in their CEOs. Information is to confidence what oxygen is to humans. Without it, confidence and often the stock price wane.
The investment world will be watching Apple closely over the next year. During Jobs’ leave of absence, the company will have the chance to see how its stock – and reputation – performs while the face of the company takes a lower profile.
Related posts:
June 30th, 2011 at 8:42 pm
Hey,nice post. Am totally impressed by this post.The first set of forces is regulation. No rules specifically address CEO health, but two principles apply:If a company discusses a CEO’s health issues, its disclosures must be “full and accurate.”A company must disclose each quarter “any known risk, event, trend or uncertainty” that could affect “future results of operatio
August 23rd, 2011 at 10:51 pm
Great post.Thanks for this informative article. Companies sometimes live and die by the confidence others place in
their CEOs. Information is to confidence what oxygen is to humans.
Without it, confidence and often the stock price wane.