Global CIO: Apple Faces Mounting Pressure On Steve Jobs Succession Plan

Apple Inc. should disclose its succession plans for Chief Executive Steve Jobs, an influential proxy advisory firm said in a report backing a shareholder proposal.

Institutional Shareholder Services said all companies should have succession plans in place, and Apple shareholders would benefit by having a report on the company's succession plans disclosed annually.

"Such a report would enable shareholders to judge the board on its readiness and willingness to meet the demands of succession planning based on the circumstances at that time," ISS said. Apple wasn't available to comment.

Apple has been reluctant to talk publicly about its plans for when Mr. Jobs has left the company, even though the company's image, products and direction are closely tied to its top executive.

(End of excerpt.)

The scenario presented by ISS would not attempt to compel Apple to divulge truly proprietary information such as names of CEO candidates, but it would require Apple to release details of its overall succession plan, the article said.

It would include such information as "criteria for the CEO position that reflect Apple's business strategy" and would require Apple's board to "identify internal candidates and produce an annual report on the succession plan," the article said. "In addition, the proposal wants the board to begin nonemergency CEO succession planning at least three years before an expected transition, as well as maintain an emergency plan."

That all seems to make sense, right? But as my colleague Paul McDougall wrote recently about the secrecy surrounding Jobs's condition and the ripple effect that could have on shareholders, one former head of the Securities and Exchange Commission says Apple's board is acting precisely as it should.

From McDougall's article, called Steve Jobs Should Take A Cue From AIG's Cancer-Stricken CEO: Not everyone agrees that Jobs' medical condition should be a matter of public record. Former SEC chairman Arthur Levitt said he thinks Apple's board is handling the situation correctly. "An intelligent investor should know the risks of Jobs having a relapse," Levitt told Bloomberg BusinessWeek. "For the board to opine on what the extent of the illness is right now I don't think is really necessary."

But investment analyst Jason Schwarz, who over the past couple of years has been among the most bullish supporters of Apple and Jobs, said the company's silence is causing confusion among not only investors but also customers, and urged Apple to be more forthcoming about its CEO.

Here's an excerpt from Schwarz's recent post on seekingalpha.com called Adjusting to Apple's New Way of Doing Things:

Apple product announcements have turned into prime investment catalysts that determine when Apple stock rises and when Apple stock falls. Needless to say, the Apple calendar has evolved into one of the most important market moving variables that investors track. With Steve Jobs on his medical leave of absence, should we be concerned that Apple doesn’t have its act together? Why didn’t we have a January 27th event? Is the iPad 2 delayed? Is Apple scrambling to come up with a new presentation method? Are they waiting for Steve to get better? These kinds of questions have investors a little uncertain in the short run. It is our opinion that no single person can replace Steve as the public face of the company and we would hope that Apple not even try to imitate the Steve Jobs presentation method. Instead, it would make sense to try something new. Perhaps let a third party production team produce a video short that can be streamed to all Apple stores. Imagine the crowd at your local Apple store for a Tuesday 10:00 am closed circuit broadcast that unveils the latest Apple products. Those stores would be even more packed than they already are. (End of excerpt.)

I suspect that these two calls for more openness from Apple will be only the first of many more to come. Because at the intersection of personal privacy, compassion, and investors' right to know lies a complicated reality that even Apple and superstar Steve Jobs will have to address.

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