This morning, Bloomberg reported that the Securities & Exchange Commission is reviewing disclosures about Apple Chief Executive Officer Steve Jobs’s health problems to ensure investors weren’t misled.
Later today, the Wall Street Journal followed up with a story reporting that the SEC “has opened an inquiry into Apple Inc.’s disclosures about Chief Executive Steve Jobs’s health.”
I am not surprised that the SEC has opened an inquiry, if it has. Last week, I wrote a story questioning the actions of the Apple board with respect to this issue, based on interview with corporate governance experts. Many experts said that Jobs and the Apple board, of which Jobs is a member, have not been forthcoming enough about the health of Jobs and the company’s succession plan.
I reiterated these thoughts on an interview with Fox News in which I criticized the actions of the Apple board. I thought it seemed a bit dodgy that Apple and Jobs could have changed their view of his health problems so drastically within one week. In my blog, I questioned the first letter that Jobs wrote. “The letter should have been much more measured in its presentation and tone, indicating that the cause of Jobs’s health problems was not totally clear,” I wrote.
Then again, it’s entirely possible that the board did nothing wrong, as Stanford law professor Joe Grundfest noted. If board members believed Jobs was going to be fine, they may not have seen a big need to be more forthcoming about his health or future, he notes. “One of the hallmarks of a complex medical condition is a diagnosis can change over time,” Grundfest says. “If the board has told the truth, then they’ve handled it best as they could.”
These are the issues the SEC will be looking into. What did the board know before the first letter was written? And what did they learn after it was written?
Admittedly, this is a very difficult situation for Apple. And I hope the company is cleared of any wrongdoing. But this is an inquiry that needs to happen in order to protect the shareholders of Apple and any other company that may find itself in a similar situation.