Abstract

This award-winning case is about Apple, Inc. (Apple), one of the world’s leading technology companies. Apple and its future were perceived as being very strongly associated with its co-founder and CEO Steven Paul Jobs (Jobs). This being the case, any adverse news on Jobs’s health had become a subject of concern for shareholders. Since 2009, the company had been at the center of a corporate governance debate with critics claiming that the board had failed to keep the investors adequately informed about Jobs’s health and slamming it for remaining silent on his successor. Jobs decision to opt for indefinite sick leave in early 2011 — for the third time since 2003— reignited this debate. While some shareholders contended that the board should be more forthcoming with information related to Jobs and demanded that it adopt and disclose a CEO succession planning policy, Apple maintained that the board did have a plan but that disclosing such vital information would diminish the company’s competitive advantage. Should the Apple board take a relook at its corporate governance policies and practices? With Apple’s future success being perceived as being so intricately linked to Jobs, should the board amend its corporate governance guidelines to adopt and disclose a CEO succession planning policy? The case focuses primarily on the role of the board of directors, the board’s relationship with the CEO, CEO Succession planning and the board, and the board’s obligations to the shareholders. It is especially suited for programs for directors and those in governance roles. The case was declared the winner of the $10,000 CMA-Alberta Award for the ‘Best Case in Corporate Governance’ at the North American Case Research Association’s Annual Meeting held at San Antonio, Texas, USA, October 2011.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the role of the board of directors and its relationship with the CEO
• Understand the significance of CEO succession planning in a company such as Apple and the role of the board in CEO succession planning
• Understand issues related to the board’s obligations and accountability to the Shareholders

Keywords

Corporate governance, Role of the board of directors, Board's relationship with the CEO, Board's obligations and accountability to the Shareholders, Succession planning, CEO succession planning policy, Power and politics, Secrecy, Full disclosure, Privacy, Competitive advantage, Apple, Steve Jobs