Jobs at Disney, Pixar and Apple

As Disney heads to the Delaware supreme court this week to once again defend its hiring and firing of Michael Ovitz, the WSJ points out that Disney will be facing a new governance challenge in the form of Steve Jobs.

Jobs would go onto Disney’s board if Disney buys Pixar and Jobs becomes a major Disney shareholder. The problem is that Jobs will remain CEO of Apple, a potential Disney competitor as Disney, like other content providers, becomes a technology firm (e.g., iTunes needs content).

Hopefully Disney will make all of the proper disclosures about this. It’s going to have to figure out, for purposes of SOX 404 internal controls reporting, and the executive certifications under SOX 302 and 906, how having a competitor on the board will affect the firm’s information gathering and reporting and the security of its business opportunities and other property.

And of course Jobs will have to be walled off from many of Disney’s decisions, especially as the federal standards of director “interest” find their way into state fiduciary law.

In a different world, having Jobs on the board could be a boon for Disney. But in this world, Disney may not easily be able to make secure agreements regarding fiduciary duties and other matters that balance the costs and benefits of Jobs’ potential conflicts. As a result, the class action lawyers may end up happier about this move than Disney's shareholders.