Is Apple Obliged To Say More About CEO's Health?

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This composite photo shows Apple CEO Steve Jobs' dramatic weight loss between the time of a June 2008 appearance (left) and an appearance in January 2005. Apple had said the weight loss was the result of a hormone imbalance.

Justin Sullivan/Getty Images

This composite photo shows Apple CEO Steve Jobs' dramatic weight loss between the time of a June 2008 appearance (left) and an appearance in January 2005. Apple had said the weight loss was the result of a hormone imbalance.

Some might say Steve Jobs isn't just the chief executive of Apple, he is Apple.

So when a Memphis hospital disclosed this week that Jobs received a liver transplant because he had "end-stage liver disease" and was the sickest patient on the list, it raised some new questions: Should Apple have disclosed more about his condition to investors?

Apple is famously cagey when it comes to discussing its own affairs. It goes to great lengths to keep its products secret. And it kept mum when its founder and chief cheerleader appeared on stage looking like a gaunt stick figure during a speech last fall.

Onlookers wondered aloud whether Jobs' 2004 bout with pancreatic cancer had returned, and Apple's share price faltered on the speculation.

Months later, in January, the company said Jobs was taking medical leave to treat what it called a "hormonal imbalance." As it turns out, sometime in the past six months, Jobs got so sick that he was catapulted to the front of the line among those awaiting liver donation at one of the nation's major transplant hospitals.

Jobs' health is, of course, cause for concern for Apple investors. But so is the way the disclosure has been handled. Fellow corporate icon Warren Buffett told CNBC on Wednesday that it was a mistake for Apple to withhold the fact of Jobs' surgery from shareholders.

"Steve Jobs is important to Apple," Buffett said, adding, "Whether he's facing serious surgery or not is a material fact."

Echoing that sentiment is Paul Hodgson, a senior research associate at the Corporate Library, an independent firm that does research on corporate governance.

"I think this needs to be laid squarely on the shoulders of the board at Apple," Hodgson says. "Basically, the board has not really communicated anything to shareholders. Shareholders had to deal with rumor, and the board should have seen that and decided that facts — whatever are available at the time — are better than rumor."

Hodgson acknowledges there are medical privacy issues involved. But he says the standards ought to be different when it comes to high-profile executives.

"Becoming a CEO and exposing yourself to the kind of limelight that that entails ... especially with a company like Apple, then privacy issues have to be dealt with very differently from private citizens," he notes.

But deciding whether to go public with such information and how much to disclose isn't a simple matter for companies.

"It is a complicated and a very complex and a very tricky situation for companies to go through," says Jeff Lloyd, managing director at Sitrick And Company. It handles crisis public relations for companies, though not for Apple.

To be fair, Lloyd says, Apple faced a difficult choice. Going public with inconclusive medical information about its executive could have left investors jittery and hurt the stock price, which might have done more damage than good.

But on balance, he says he advises clients to disclose as much as possible to prevent rumors from flying because investors often discover the truth after the fact anyway. "Then you've created a second problem: Why didn't you disclose this? Why didn't you let the shareholders know?" he says.

At the very least, Lloyd says, the board of directors should never let one person's fate control the fate of the company.

"You don't accomplish what Apple has done just with one person," he says. "And I think that that is something that they need to communicate to the market and communicate to their shareholders, that this is not a one-man band."

Even executives who have achieved demigod status — as Steve Jobs has for some — are, as they say, a perishable asset.