A lack of succession planning transparency could create governance issues at Apple.
Steve Jobs’ resignation as Apple’s CEO spurred many talks on the future of leadership at the multinational tech giant. Now that Tim Cook has taken over the reins from Apple’s iconic leader, industry observers feel the company is not transparent in clarifying their new roles.
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‘What remains to be seen is whether Jobs is truly letting go of the reins,’ says John McGuire, a partner focusing on corporate law matters at Ohio-based law firm Calfee, Halter Griswold. ‘He will remain chairman as Cook assumes control of Apple, but too often the founder and now former-CEO has difficulty actually moving into the background.’
Cook, 50, joined Apple during its renaissance period and since then has been credited for preventing some closures of factories and warehouses worldwide.
According to Bloomberg, Jobs, 56, told the board he intends to be an active chairman. However, investors may have trouble understanding Jobs’ new role.
Yet, some experts, such as Charles Elson, director of the University of Delaware’s Center for Corporate Governance, say keeping Jobs in a leadership position may be a good idea. However, even he tells Bloomberg, 'A fuller explanation of what his role as chairman will be would be helpful.’
Some people become chairman and still run the company. Other people become chair and you never see them again,’ Elson explains.
Apple faced a succession planning dilemma in 2009 when then CEO Steve Jobs took a leave of absence due to ill health. In the midst of this news, Apple’s shareholders voted on a proposal requiring the company to ‘disclose a written and detailed succession planning policy.’ But events appear to have overtaken the shareholders’ concerns, since Jobs announced that he is taking indefinite medical leave.
‘Effective succession planning enables governance to proceed uninterrupted,’ says McGuire, who also advises clients on corporate succession planning. ‘A well-communicated succession plan means that internal resources and external business contacts know who is in charge and how decisions are made. That predictability generally lends comfort to all involved.’
Until Apple clarifies the new chairman and CEO roles at the company, experts will continue to criticize the tech giant’s succession planning practices.
‘If all goes according to plan (and so far this has been a textbook case), Cook will be the driving force of Apple, charting its course and motivating its crew,’ McGuire reasons. ‘If Jobs cannot overcome his well-known tendency to micromanage, there will be confusion regarding who is really in control and stasis will occur – and there cannot be a more crippling result in the electronics industry.’
