Apple shuffles the chairs for Jobs to stay on

THE MASTER OF CEREMONIES at Apple, Steve Jobs has shown once again that he really is the puppet master of the IT industry, but his elevation to chairman of Apple's board might not be the sea change that most predict.

Much has been said about Jobs' ability to direct consumer product trends in the past 10 years and there is little doubt that without Jobs Apple would have not seen the third millennium, but as they say, all good things must come to an end, or in this case a shuffling of chairs. Apple's board of directors knows from painful experience that taking Jobs out of the loop simply doesn't work, but something had to be done about the fact that largest company in consumer IT is being led by a CEO who has been on gardening leave for the majority of 2011.

Apple's board of directors was put in a difficult position. The fact is that a company the size of Apple needs a powerful CEO - just ask AMD - one that is seen by investors as being in control of the firm's future. There's no doubt that Jobs' influence within Apple is as strong as ever, but the question is, could Jobs meet Apple's own performance requirements as a CEO.

Like all large companies Apple has governance guidelines used primarily to reassure investors that there are checks and balances in place to make sure the board and executives are fit for purpose. Apple's corporate governance guidelines, last updated in November 2010, are fairly concise and the penultimate clause makes for interesting reading.

"The Board should undertake an evaluation of the Board, its Committees and each member at least annually to determine whether it and its members and committees are functioning effectively. The Nominating and Corporate Governance Committee is responsible for coordinating and overseeing the annual Board evaluation process in accordance with the charter and principles of that committee."

Essentially Apple's board members have to show they are doing a good enough job to keep their positions. The final clause relates to salaries, but given that Jobs takes home the princely sum of $1 every year, it's difficult to see remuneration being an issue. The question then is what exactly does Apple expect its CEO to do? That question is answered to some degree in an amendment to the firm's Articles of Incorporation filed back in 1999, in section 5.1:

(a) To act as the general manager and chief executive officer of this corporation and, subject to the control of the Board of Directors, to have general supervision, direction and control of the business and affairs of this corporation.

(b) To preside at all meetings of the shareholders and, in the absence of the Chairman of the Board or if there be no Chairman, at all meetings of the Board of Directors.

(c) To call meetings of the shareholders and meetings of the Board of Directors to be held at such times and, subject to the limitations prescribed by law or by these By-Laws, at such places as he or she shall deem proper.

(d) To affix the signature of this corporation to all deeds, conveyances, mortgages, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board of Directors or which, in the judgement of the Chief Executive Officer, should be executed on behalf of this corporation; to sign certificates for shares of stock of this corporation; and, subject to the direction of the Board of Directors, to have general charge of the property of this corporation and to supervise and control all officers, agents and employees of this corporation.