It seems the US Securities and Exchange Commission will soon weigh in on the tricky ethical issue of health privacy for public figures.
According to a Bloomberg report, the regulator is investigating whether investors were misled as concerns about the health of Apply CEO and founder Steve Jobs began to surface.
Investors have been pressing for information on Jobs’s health since June, when he appeared thinner at an Apple event. The company’s stock whipsawed this month after Jobs, who battled pancreatic cancer in 2004, said he would remain CEO while seeking a “relatively simple” treatment for a nutritional ailment. Nine days later, Jobs said he would take a five-month medical leave after learning his health issues were “more complex.”
“The good news flipped by the bad news makes one wonder what Apple knew,” said James Cox, a law professor at Duke University in Durham, North Carolina. '
“It’s not surprising for the SEC to come in and look afterward, given the pressure and publicity regarding their handling of a lot of cases,” such as criticism of the SEC’s response to Bernard Madoff’s alleged $50 billion Ponzi scheme.
The news comes as Apple shares soar this morning on news that the company bucked the bad economic news of the past few months to post a bump in earnings.
Despite the good news, however, the debate over Jobs' health continues -- and so it should, according to Laura P. Hartman, professor of business ethics at Chicago's DePaul University, commenting this morning in this morning's Toronto Star.
"Privacy is most often defined in two ways – both the right to be left alone as well as the right to control what information people know about you," explains Hartman. And while any individual has a right to both aspects, famous people choose to forfeit that, to some extent.
In the case of CEOs who have closely yoked their companies to their larger-than-life personas – as Jobs, Oprah and Martha Stewart have – our ethical and legal requirement to respect their privacy bumps up against the company's onus to disclose information material to shareholders and employees.
If there's news in hand "that can affect whether a reasonable investor would buy or sell ... then it must be disclosed" according to U.S. securities law, Hartman says.
"The fact Jobs stepped down makes it unquestionable that it's material ... it impacted his ability to serve." While most might not know who the CEO of, say, Starbucks is, Jobs has chosen to identify himself intimately with the company.
His detail-obsessed, risk-taking style is widely credited for Apple's bounce back from its disappointments in the '90s. "Take out the issue of health and this is a question of whether the CEO is going to step aside," argues Hartman.
In short, according the Hartman, by making himself the face of his company, Jobs gave up on his right to privacy.