Environmental damage threatens another CEO's otherwise successful legacy.
Steve Jobs is one of the most admired CEOs of all time. He transformed his company from a middling player into one of the world's largest and most successful businesses. He transcended mere leadership of his industry to transform the way we interact with information and with each other.
But following fast on the heels of Jobs's announcing his retirement was the latest in a series of revelations of how Apple has inflicted serious harm on people and the environment. Last week, renowned Chinese environmentalist Ma Jun released another damning report on pollution by Apple suppliers. In May, three workers died and 16 were injured by an explosion at a factory where iPads are manufactured, the latest in a string of deaths and labor abuses associated with Foxconn, one of Apple's major suppliers. Last year, in spite of documentation of numerous problems, Jobs said its factory in China "is not a sweatshop."
Pollution and human rights abuses cannot be offset by great products. Steve Jobs -- and all other CEOs -- must be judged on how they affect people and planet as much as how they affect the company's share price. An increasing number of investors agree.
Those who doubt that business success can be overshadowed by social and environmental issues need look no further than another once-revered CEO: John Browne of BP.
By taking over Amoco and Arco, Browne transformed the former British Petroleum from a "two-pipeline company" (with major assets only in the North Sea and Alaska) to a true supermajor. In 1997, he earned praise from environmentalists and the wrath of his oil titan peers by becoming the first head of a major energy company to acknowledge the realities of climate change and urge action.
Browne was anointed "The Sun King" by the media, frequently voted Britain's most-admired chief executive, and even knighted with the honorific "Lord" by the Queen of England.
But then came the Texas refinery explosion that killed 15 people in 2005, followed by the rupture of a pipeline the following year that oozed 200,000 gallons of oil into the Alaskan tundra. Both occurred on Browne's watch.
And of course, last spring saw the Deepwater Horizon rig explode to such disastrous effect in the Gulf of Mexico. Browne had stepped down by then, but some speculate that he created the cost-cutting and risk-taking culture that led to the Gulf disaster.
Browne's achievements are no less historic. He shifted the global debate about climate change. He created new models for resource development in Azerbaijan, Indonesia, and elsewhere, in which the company partnered with human rights groups and grassroots organizations to ensure that local communities benefited from the company's presence. (I worked on such projects for BP under Browne's tenure.)
Yet those acts weren't enough to prevent major harm elsewhere -- harm that permanently defined BP in the eyes of many.
While Apple may not be able to wreak damage on the same scale as BP, it is not too much to ask any company to take responsibility for safety and environmental standards in its supply chain. Apple is making efforts in this area, but they seem to be coming up short: The company earned a mediocre "Room for Improvement" from the Enough Project in its study of the 21 largest electronics companies to assess progress toward conflict-free supply chains. It earned a similarly lackluster 4.9 out of 10 in Greenpeace's Guide to Greener Electronics, primarily for its lack of disclosure about its supply chain.
In his new role as chairman, Jobs should start by announcing that henceforth Apple will be as much of a leader on social and environmental issues as it has in every other aspect of its performance. He should set up a task force of external experts including Ma Jun, give them free reign to inspect Apple's supply chain, and have them publish regular reports on their findings.
Apple should also catch up with the rest of the business world and publish its suppliers list. HP has been publishing its list since 2008. Nike began doing so in 2005 after similar criticism to what Apple is facing, and is still doing so today without the negative repercussions that they claimed would ensue.
There is no question that Jobs's leadership of Apple gifted us with beautiful products that have revolutionized how we interact with information and each other. But worker deaths, factory pollution, and lack of disclosure are not the hallmarks of a great company, nor of a great leader. Steve Jobs needs to tackle those issues with the same relentless focus that has made Apple such a success -- so far.