The Wall Street Journal Profiles Apple's Board of Directors

[MacRumors]

The Wall Street Journal publishes a profile (subscription required) of Apple's Board of Directors, focusing on the lack of independent executives on the board in the wake of Jerry York's death last week. The report notes that Apple CEO Steve Jobs holds a remarkable amount of sway over both the company operations in general and specifically the Board of Directors that is supposed to help guide the company, a situation that many investors have seen as undesirable.

Investors have long urged Apple's directors to be more independent of the company's powerful CEO, even as Apple has continued posting strong financial results. An independent board represents the interests of shareholders and can challenge the CEO when necessary, said David Nadler, a corporate governance expert and senior partner at consultants Oliver Wyman Group.

Mr. York's successor should be somebody "with sufficient stature and importance to take the CEO on," said Roderick Hills, a former Securities and Exchange Commission chairman, who has led a dozen audit committees.

York joined Apple's Board of Directors in 1997 when Steve Jobs took on the "interim" CEO title after the ousting of Gil Amelio in a boardroom coup. Jobs blamed much of Apple's troubles on the existing board and demanded that the majority of them resign, allowing new directors such as York to come on board to help achieve Jobs' vision.

Today's report notes that Apple's directors have rarely challenged Jobs in boardroom meetings, even when many of them disagreed with his handling of his medical leave of absence for a liver transplant during the first half of 2009. York was reportedly "disgusted" that Jobs failed to reveal his medical issues in Apple's announcement that Jobs would not present at its final Macworld Expo keynote in January 2009, with York even contemplating stepping down from Apple's board over the incident.

Looking forward, it seems likely that Apple will seek to add at least one more member to its Board of Directors, as the current count of six members is now among the smallest of Fortune 500 companies following York's death and the resignation of Google CEO Eric Schmidt in August 2009. Apple, however, has made no public signs that it has begun the process of searching for new members for its Board.

Article Link: The Wall Street Journal Profiles Apple's Board of Directors

 

[iRance]

Apple Board of Directors Unite!

 

[kiljoy616]

Dictatorship, don't like anyone telling them what to do. I figure he has to find people that will fall in step with his way.

 

[sishaw]

Don't get me wrong, I love most Apple products and think Steve Jobs is a genius -- if a bit quirky -- but Apple is very much a reflection of his vision, and I don't think a truly independent board is anywhere on his list of priorities. As long as the stock does well, no one's going to rock the boat.

 

[Eddyisgreat]

Don't get me wrong, I love most Apple products and think Steve Jobs is a genius -- if a bit quirky -- but Apple is very much a reflection of his vision, and I don't think a truly independent board is anywhere on his list of priorities. As long as the stock does well, no one's going to rock the boat.

can I get an amen.

 

[dagamer34]

Don't get me wrong, I love most Apple products and think Steve Jobs is a genius -- if a bit quirky -- but Apple is very much a reflection of his vision, and I don't think a truly independent board is anywhere on his list of priorities. As long as the stock does well, no one's going to rock the boat.

And when he's gone, what happens then? It is naive to believe that one man will exist to run a company forever, and Jobs should eventually start thinking about how Apple will run without him. You saw what happened when he left the first time, and I doubt he wants a repeat of that.

 

[muskratboy]

"a situation that many investors have seen as undesirable."

right. bring back gil amelio!

because steve keeps making all those stupid, unprofitable decisions....

 

[cvaldes]

AAPL closed above $229 today.

Makes it a bit difficult for shareholders to complain.

 

[RaZaK]

Riiiiiiiiiiiiiiiiiiiiiiiiiiiight

So, Uncle Stevie, in the name of "good corporate governance" is going to voluntarily add more independent board members to his company so that they can kick him out of his own company...AGAIN?!?!?

Dream on, people. As long as the Apple continues raking in the dough, which it seems poised to do for the forseeable future, investors will make waves every now and then about lack of board independence. However, no real change will happen unless the stock price tanks for some reason.

Uncle Stevie and FTW

 

[AidenShaw]

AAPL closed above $229 today.

Makes it a bit difficult for shareholders to complain.

Only if they sell all their AAPL today.

If they expect continued returns, they should be very concerned about the governance of the company.

The post-Jobs era is coming. Sooner or (hopefully) later - but it's coming. Investors should be concerned about the long term issues.

 

[NebulaClash]

And when he's gone, what happens then? It is naive to believe that one man will exist to run a company forever, and Jobs should eventually start thinking about how Apple will run without him. You saw what happened when he left the first time, and I doubt he wants a repeat of that.

Nor will we get a repeat of that. We saw last year Tim Cook temporarily taking over and doing just fine. So clearly Jobs HAS been thinking about how Apple will run without him.

It's good to get a strong and independent board, but no investor in the company is displeased with the stock results. Sometimes I think competitors want someone on the board to overrule Jobs just so Apple does less well.

 

[longofest]

Only if they sell all their AAPL today.

If they expect continued returns, they should be very concerned about the governance of the company.

The post-Jobs era is coming. Sooner or (hopefully) later - but it's coming. Investors should be concerned about the long term issues.

Agreed. You have to wonder how short-sighted will Apple become (or are they now) without an independent board looking out for the post-Jobs era.

There is no doubt that Jobs has been one of the best, if not the best CEO of all time. But that doesn't mean he isn't fallible, and that doesn't mean there shouldn't be other people making sure conflicts of interests don't arise.

 

[AidenShaw]

No, we really didn't see that...

Nor will we get a repeat of that. We saw last year Tim Cook temporarily taking over and doing just fine. So clearly Jobs HAS been thinking about how Apple will run without him.

Tech companies' advanced development and development cycles are multi-year projects.

We don't know how connected Jobs was during his illness, but we know that at the most Cook ran the company for 6 months or thereabouts.

Obviously, Tim's bonus shows that Jobs and the board were happy with his performance.

But nothing in this event proves that Apple will survive Jobs' departure without disruption. Jobs being on medical leave with email/conference connections is not "Jobs not present".

 

[Twenty5]

Jon Rubinstein

"Looking forward, it seems likely that Apple will seek to add at least one more member to its Board of Directors, as the current count of six members is now among the smallest of Fortune 500 companies following York's death and the resignation of Google CEO Eric Schmidt in August 2009. Apple, however, has made no public signs that it has begun the process of searching for new members for its Board."

They should just get Jon Rubinstein to join.

And then let Apple take over Palm.

 

[justinfreid]

I nominate...

I nominate...Bill Gates.

 

[justinfreid]

Obviously, Tim's bonus shows that Jobs and the board were happy with his performance.

I think it also shows that they want him to stay with the company long after Jobs leaves; consider the stock options and the stratified vest dates.

Jobs is aware of his mortality, I'm sure, and if the longterm plans he's made for after his departure are as strong as they've been during his tenure as CEO, Apple will continue to do well.

 

[deconstruct60]

... I don't think a truly independent board is anywhere on his list of priorities.

It is not his company. Steve Jobs does not own a majority stake in Apple Corp. Having a phony board is not a good practice by any well run company. Individuals are fallible. All of them.

If he really is good then shouldn't have a problem folks checking his choices. Nor think he is all knowning about business practices ( back dating options wasn't glaring obviously a legal problem .... really ??? )

As long as the stock does well, no one's going to rock the boat.

Chuckle, the guys who ran Enron , Bears Sterns , Lehman , etc. etc. were all talking that same yang before they collapsed and tanked. "Our stock price is high, we're are genius managers" blah, blah , blah, blah .

Berkshire Hathaway stock price is many times higher and Warren Buffet isn't scared of a competent board. That's one reason why it is. (among others. )

 

[RalfTheDog]

Does anyone ever read these titles?

Apple needs strong leaders on the Board of Directors. They need leaders who can help Mr. Jobs define and implement his vision for the company. They need leaders who can help extend this vision. What they do not need is disruptive members who will fight his vision.

The board of directors does not need yes men. It needs people with an independent voice who can point out issues they see in the future. At the same time, Mr. Jobs is the CEO. They need to back his vision or step down.

 

[NebulaClash]

Obviously, Tim's bonus shows that Jobs and the board were happy with his performance.

And since they would know and we would not, I trust their judgment.

 

[deconstruct60]

Dream on, people. As long as the Apple continues raking in the dough, which it seems poised to do for the forseeable future, investors will make waves every now and then about lack of board independence. However, no real change will happen unless the stock price tanks for some reason.

Oh so Toyoda is a well run company because they responded with fixes after the recalls. Or would it have been better if Toyoda had nipped the problem in the bud before it got huge?

A better run company would fix problems before the stock tanks. One that waits until thinks blow up to fix t hem is not a well run company.

I'm sure the follow who just follow the stock just to be in the herd, won't care but anyone who is looking for well run companies will know this is a glaring deficiency. Especially for a company whose CEO reportedly almost died last year.

Not that Jobs has to put anybody on the board just to fill a slot. However, it is ridculous for him to assert there are not any qualified folks in the world to fill a couple seats on the board who doesn't have "Steve Jobs" flunky as their primary qualification.

 

[writingdevil]

totally agree

I think it also shows that they want him to stay with the company long after Jobs leaves; consider the stock options and the stratified vest dates.

Jobs is aware of his mortality, I'm sure, and if the longterm plans he's made for after his departure are as strong as they've been during his tenure as CEO, Apple will continue to do well.

Agreed Jobs is a (highly recognized) world class exec. To think you have to second guess him on the continuation of his legacy says more about your lack of understanding of enterprise than it does of his.

 

[RalfTheDog]

... Chuckle, the guys who ran Enron , Bears Sterns , Lehman , etc. etc. were all talking that same yang before they collapsed and tanked. "Our stock price is high, we're are genius managers" blah, blah , blah, blah .

Berkshire Hathaway stock price is many times higher and Warren Buffet isn't scared of a competent board. That's one reason why it is. (among others. )

The companies you are talking about were all gunning for short term money at best or fake money at worst. Apple has good sales. They are not making fake money. They are running a very long game. Each product they make is in one way or another a building block for the next (The iPod was a building block that led to iTunes. Itunes was a building block that led to The Apple TV and video services. These along with the Mac Book Air were steps to the iPad.)

Each product that Apple builds comes with a new set of skills that they need to build the next product. If more American companies worked like this, we would have no competition from overseas.

 

[nostaws]

Steve, Call me. I am available.

 

[deconstruct60]

. They need to back his vision or step down.

No. They either back his vision or fire him.

The CEO works for the company. The company is owned by the share holders. If the majority of the board thinks the CEO is off his game and causing problems for the owners they should fire him.

If the board is set up so that no matter what the CEO does he/she never gets fired then that a non functioning board.


Sure Jobs got canned back in the 80's. However, if the current version of Jobs isn't a significantly better CEO than the he was back then, he probably should be canned. He appears to be, but there still needs to be someone who keeps him on top of his game. Just showering people with stupid large amounts of money isn't enough to keep anyone sharp. In fact, after they have more money than most folks can spend on normal stuff .... money, in and of itself, isn't really a good "carrot" to use anymore.


P.S. Cook is the Chief Operating Officer. Which means he was already in charge of day-to-day operations before Jobs went on leave. So some sizable bonus because Apple ran smoothly while Jobs was gone.... errr that was day job in the first place.

They may be throwing it at him as golden handcuffs so he will blow off vast majority of offers may get after the greater exposure. Also more likely to continue to wait for a opening to the next level up.

However, don't recall Apple making any huge strategic moves. Buy some big company... nope. Hire some major exec that wasn't already in flight ? Cancel or introduce product line ? Sure he took more personal responsibility for the accuracy of the SEC filings since perhaps Steve didn't sign off on those.

 

[alexk82]

i wonder

I wonder if Schmidt and Jobs ever got into each others faces