Re: Oracle's Mission Statement

From: Daniel Morgan <damorgan_at_x.washington.edu>
Date: Mon, 08 Dec 2003 09:15:56 -0800
Message-ID: <1070903792.12388@yasure>

Comments in-line.

J Alex wrote:

> "Daniel Morgan" <damorgan_at_x.washington.edu> wrote
>

>>J Alex wrote:
>>
>>>"Daniel Morgan" <damorgan_at_x.washington.edu> wrote
>>>
>>>
>>>>Both Bill and Larry are executives in for-profit US corporations. They
>>>>are bound, and I do mean bound by law, to maximize shareholder value.
>>>
>>>
>>>No, they're not.
>>
>>As a member of the Board of Directors of a U.S. C corporation I an
>>assure you, on advice from my attorney, that they are legally bound to
>>do so.

>
>
> They're legally bound to attempt to be profitable and for directors to act
> in the best interest of the corporation. There is no requirement for a C
> Corp to "maximize shareholder value" by expanding the business, as your post
> said.

Stick it IT as obviously law is not your strong point. Corporate officers and Board Members are under no obligation to produce a profit. Were that the case Jeff Bezos wouldn't be at Amazon.com. A corporation's only legal requirement is, literally, "maximizing shareholder value." That can be done by many methods ... including selling the firm: An act that doesn't require a single revenue generating transaction. In fact many companies are founded based on an idea, the firm sold for shares in another company, and not a single dollar ever changing hands.

> Then if you attended law school for two years you know that citing examples
> of companies that try to maximize shareholder value is not the same as
> citing a statue requiring they do so. Matter of fact, one of your cites is
> for Freddie Mac which has come under fire for ignoring it's mission
> statement in the quest to maximize "shareholder value".

I would have thought the web page from the US Securities and Exchange Commission would have made the point: Apparently not. Ok. General Automotive Mfg Co. v singer, 19 Wis.2d 528, 120 N.W.2d 659, 663.

Now are you happy? If not contact the SEC or hire your own attorney. ;-)

-- 
Daniel Morgan
http://www.outreach.washington.edu/ext/certificates/oad/oad_crs.asp
http://www.outreach.washington.edu/ext/certificates/aoa/aoa_crs.asp
damorgan_at_x.washington.edu
(replace 'x' with a 'u' to reply)

Received on Mon Dec 08 2003 - 11:15:56 CST