Apple (NASDAQ:AAPL) is going through a similar situation as Berkshire Hathaway (NYSE:BRK-A) when concerns over the aging Warren Buffett were aired as to what type of succession plan the company had in place when Buffett stepped down.
Shareholders in Apple have been saying similar things over the years, understanding how vital CEO Steve Jobs was to the success of the business.
The point isn't necessarily to reveal what is happening to Jobs, but to let shareholders and potential investors in Apple know what the company will do if Jobs will no longer be able to function as CEO.
This doesn't even mean naming a specific successor if that happens, but to reveal what type of plan is in place if it does.
For example, Berkshire and Warren Buffett eventually revealed to shareholders they had three potential candidates to fill Buffett's shoes if something happened to him or he retired.
Then they laid out what the qualifications for the position were in making their decision.
One reason Apple may not be talking of a plan is the effect it could have on the share price, but that's going to happen one way or the other concerning Jobs.
To talk of a succession plan and give details concerning the parameters of a replacement, is just good business, and being a public company, the shareholder public not only deserves to know, but need to know in order to make informed decisions.
Even though Steve Jobs may be a private individual, the second he became the CEO of Apple he no longer had the privacy privileges he had before he took on the role.
Again, this isn't referring to specific details of his condition, but could talk about his general condition, and, as mentioned, what the criteria for replacing him would be.
Institutional Shareholder Services said, "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."
In the past when Andy Grove revealed he was battling cancer, it didn't hurt Intel (NASDAQ:INTC), and neither did it hurt high-flying Southwest Airlines (NYSE:LUV) when CEO Herb Kelleher announced he had cancer as well.
The point isn't whether or not Jobs has cancer again, but that those CEOs above were considered vital to the success of their companies as well, and Kelleher especially, was extremely charismatic and considered indispensable to Southwest at the time.
Apple could easily put together a plan that respects Jobs' privacy, but at the same time reveal a plan, and possibly a general prognosis as to Jobs' health.
Minimally a succession plan must be revealed by Apple; something they should have done far before Jobs' health became an issue.
Monday, February 7, 2011
Apple (NASDAQ:AAPL) Must Answer Succession Plan Concerns
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