Graham and Dodd Investor writes:
In SEC filings, top executives of corporations have to disclose their employment history for the past five years, in order for shareholders to judge their suitability for the posts that they hold. Perhaps a similar requirement should extend to certain other aspects of their lives.
This issue came to the forefront in connection with the pancreatic condition of Steve Jobs at Apple. Considering that one man represented the heart and soul of the company, his health was a serious concern for shareholders. Outlines, but probably not sufficient details, of his condition were disclosed on an ad hoc basis.
Should Mr Steve Jobs (or Apple) disclose his health conditions? YES. It is critical information for investors to make informed decisions. At the least, most people believe it is.
Should investors expect he will? Of course, NOT. He has a right not to disclose his privacy, and I believe such disclosure should not be imposed on anyone by any authority (after all, investors can 'own' Apple Inc. but NOT Steve Jobs). And - who do you think he is? He is STEVE JOBS. If you're a rational investor, you should never expect he will make full disclosure on anything (just for the sake of investors, in particular).
So, you have a choice. - You are prudent and choose not to invest in the company that has serious lack of disclosure on material information (and does not seem to think it is an issue), or you take certain (or huge, depending on your perception) risk on the company that has the incredible CEO and attractive products. You just cannot have it both ways.
Graham and Dodd Investor: What Should Top Executives of Corporations Have to Disclose About Their Personal Lives?
