Apple Inc. should provide greater detail about Steve Jobs’s new responsibilities as chairman to give investors clarity on his role at the company, corporate-governance experts said.
Jobs resigned as chief executive officer and was elected to the new position of chairman, Apple said yesterday. As former Chief Operating Officer Tim Cook takes over as CEO, questions remain about whether Jobs will help manage the company’s operational decisions or just lead the board, said Charles Elson, director of the University of Delaware’s Center for Corporate Governance, in an interview.
“A fuller explanation of what his role as chairman will be would be helpful,” said Elson. “Some people become chairman and still run the company. Other people become chair and you never see them again.”
Jobs, 56, told the board he intends to be an active chairman. Investors may have trouble deciphering Jobs’s new role as long as there is a lack of information about his health and job duties, said Elson. Still, keeping Jobs in a leadership role may be a good idea because it gives the company continuity, important for Apple’s investors and customers, said Jay Lorsch, a professor at Harvard Business School in Boston.
Jobs had been on medical leave since Jan. 17 following a 2003 cancer diagnosis and a liver transplant in 2009. Cupertino, California-based Apple, maker of the iPhone, iPad tablet and Macintosh personal computers, has revealed few details about Jobs’s cancer or his transplant. The company is unlikely to begin talking about them now, and explaining his duties as chairman are more important than disclosures about his health, Elson said.
Steve Dowling, a spokesman for Apple, declined to comment.
Role of Chairman
All companies should make it a practice to outline the roles of their chairmen, even though they are under no legal obligation to do so, said Harvard’s Lorsch, who has served on the boards of four publicly traded companies.
Moving former CEOs to chairman positions isn’t recommended corporate governance, Lorsch said. A lack of clear boundaries can confuse directors and investors as to who is actually running the company, he said.
“If the prior CEO stays on as chairman, particularly if he’s the founder, he tends to overshadow the CEO,” said Lorsch. “He makes it very difficult for the CEO to set a new course.
“Most of the time, the best thing is to ask the retired CEO to do something else,” Lorsch said. “But in this case, Apple wants the impression that Jobs is still there, even if he’s not running the place.”
Apple declined $2.46, or 0.7 percent, to $373.72 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have gained 16 percent this year.