Re: Oracle's Mission Statement

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

I never claimed it was. But I do know I'm right on this.

> Corporate
> officers and Board Members are under no obligation to produce a profit.

I said *attempt* to produce a profit. And yes, the IRS takes a dim view of for-profit companies that always return losses without attempting to be profitable.

> Were that the case Jeff Bezos wouldn't be at Amazon.com.

Bezos has always said his goal was to make Amazon profitable and he was hounded about it mercilessly.

<snip>
> > 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. ;-)

Did you read the case you cited? It is related to someone acting in his interest, not his company's. Singer was acting as GAMC's agent by taking orders for them, but then he subcontracted some of those orders out to GAMC's competitors and personally pocketed the profit without telling GAMC. This has nothing to do with a CEO being legally obligated to maximize shareholder value.

As you didn't cite a statute and the court case you cite is not relevant, so I can only guess that the reason you did not cite such a statute is that you could not find one. Received on Mon Dec 08 2003 - 18:25:47 CST