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Full Disclosure?
Apple CEO Steve Jobs' battle with pancreatic cancer has increased debate in recent years over whether top executives should inform their companies of illnesses that may put them and their organizations' future at risk.
Are CEOs and other top executives at large companies obligated to inform their organizations when they have a serious illness? There may be no definitive answer to that question, but some situations do warrant an executive disclosing such information to the organization, some experts say. "If the CEO has been diagnosed with something that's really serious and is going to get in the way of doing his or her job, then certainly they need to inform the board and probably their senior colleagues," says Fred Foulkes, a professor and faculty director at the Human Resources Policy Institute and a professor of organizational behavior at Boston University's School of Management. This issue has been reignited by the recent disclosure that Steve Jobs, CEO of electronics and software giant Apple Inc., initially preferred alternative treatment methods in his battle against pancreatic cancer. Jobs, a Buddhist and vegetarian, had kept his condition, diagnosed in 2004, mostly private, but as head of a company that employs more than 20,000 workers worldwide, the revelation renewed questions and concerns over whether top executives have a duty to notify employees, boards of directors and senior management of a serious illness. The issue of executive disclosure is a thorny one with possible legal implications, and an illness that could impact share prices "may run up against securities law," says Peter Cappelli, professor of management and director of the Center for Human Resources at the Wharton School of Business, University of Pennsylvania. But in most instances when an executive has a serious illness, he or she should "err on the side of disclosure," Cappelli says. "People find out these things anyway and then make up stories around them that are typically worse than the reality," he says. Jobs did notify his board of directors and top leadership, according to a report by Fortune magazine. After consulting with attorneys, the company opted to keep the news to itself. Assuming a CEO or other corporate leader does share information regarding a serious illness, HR leaders may play a role in communicating the message, Foulkes says. How such a message is communicated and HR's involvement in spreading the word varies from company to company, Foulkes says. But the effort must be coordinated, he says, to ensure the same message is delivered both internally and externally. By and large, that effort should be spearheaded by corporate communication representatives, who are "better skilled at handling these disclosures," adds Cappelli. It wasn't until July 31, 2004 that Jobs had successful surgery to remove the cancerous tumor, relieving the small group of confidantes he had informed of his illness. For nine months prior to that, he had instead adopted a special diet he hoped would stave off the disease. His employees were only made aware of his battle with pancreatic cancer -- and assured he would soon be returning to work -- in an e-mail the following day. That message was later released to the media. While the prognosis for pancreatic cancer is usually bleak, Jobs said that he had a rare, less aggressive and treatable form of the cancer, known as islet cell neuroendocrine tumor. Publicly, Apple answered no further questions regarding the matter, citing Jobs' need for privacy, according to a recent Fortune article. How long Jobs had been ill, and the fact that he considered not having surgery, remained largely unknown. "It was very traumatic for all of us," an individual with prior knowledge of Jobs' condition told Fortune, speaking on condition of anonymity. "We all really care about Steve, and it was a serious risk for the company as well. It was a very emotional and very difficult time. This was one page in the adventure." Ultimately, Foulkes says, the severity of an executive's condition should be a deciding factor. If an illness, such as an inoperable brain tumor, will force an executive to step down, they should inform at least the company's board of directors and senior management, to allow a temporary or permanent successor to be named, Foulkes says. A diagnosis of prostate cancer, however -- a very treatable disease -- may not need to be disclosed throughout the organization, Foulkes adds. Each situation, and the way the organization chooses to handle it, is unique. Jobs, a well-known, charismatic and controversial leader, is synonymous with the company he helped build. In such cases, there is a delicate balance to be struck, Foulkes says, but any CEO with a pancreatic cancer diagnosis should opt to keep those with a vested interest in the company abreast of his or her condition from an early stage. "You have to respect peoples' right to privacy," Foulkes says, but from an organizational standpoint, "you need to take the lead on this stuff."
April 15, 2008 Copyright 2008© LRP Publications |
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