25 June 2009

For corporate governance experts, and perhaps federal regulators, the biggest question is whether Mr. Jobs’s approach has led to violating laws that cover what companies must disclose to the public about the well-being of their chief executive.

On that key issue, the experts are divided. Some believe Apple did not need to disclose Mr. Jobs’s liver transplant because Mr. Jobs was on a leave of absence and had passed responsibility for the day-to-day operations of the company to the chief operating officer, Timothy Cook.

Other governance experts argue that the liver transplant now makes one of Apple’s assertions from January — that Mr. Jobs was suffering only from a hormonal imbalance — seem like a deliberate mistruth, unless Mr. Jobs’s health condition suddenly deteriorated. Of course, no one knows enough to say definitively.

Most governance experts do seem to agree on one point: that the secrecy that adds surprise and excitement to Apple product announcements is not serving the company well in other areas.

“In this environment, where transparency is critical, the more information you give the marketplace the better,” said Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “For a technology company that views itself as innovative, it’s a little odd that they are getting a reputation for lack of transparency.”

Apple’s stock dropped $2.11 to $137.37 on Monday amid a larger market sell-off. And the company did, in fact, have something to reveal: it said it had sold a million units of its new iPhone 3G S over the weekend, well above analysts’ forecasts.

via Apple’s Management Obsessed With Secrecy - NYTimes.com.

I wonder if there’s a way for Apple to manage its message of product surprise without clamping down so strongly on even the slightest leaks.  It may have the benefit of improving speculation and excitement about products, but it also seems to make the work environment stricter and harsher that the CIA.  But the strongest argument is that it must provide accurate financial and governance information to investors.

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