Re: Oracle's Mission Statement

Paul <paul_at_not.a.chance.ie> wrote in message
> J Alex wrote
>
>
> > Interesting that you didn't post the link. Is it because the full quote is:
> > "This author contends, however, that corporations are expected, wherever
> > possible, to integrate extrinsics with the corporation's primary obligation
> > to maximize shareholder value."
> > In other words, this is someone's opinion, not a statute. And, of course, it
> > is not at all a defense of your original statement that Larry Ellison and
> > Bill Gates have to make every attempt to grow their companies or they're
> > breaking the law.
>
>
> No, they don't have to attempt to "grow their companies" (if indeed such
> a concept can have meaning in a multi-shareholder company) - they are
> legally mandated as directors to try and maximise shareholder value -
> this may or may not mean "growing" the company.

I'm not sure why you felt the need to post to a dead thread, but, since you did, I'll reply:

No, they're not. According to Professor Bagley of the Harvard School of Business:

"Corporate officers and directors are legally required to act in the best interests of the corporation. Contrary to popular belief, this does not mean maximizing shareholder value without regard for the effect on employees, customers, suppliers, the environment, or the communities in which the corporation does business.

The courts in Delaware (where a majority of the Fortune 500 are incorporated) have made it clear that maximizing shareholder return is required only when the breakup of the corporation has become inevitable or there is a change of control."

In other words, only when selling the company are they legally obligated to try to maximize shareholder value (i.e. get the highest price).

Full text at:
http://www.pwcglobal.com/extweb/newcoatwork.nsf/docid/325807FA02AAE53A85256DA2004849C5 Received on Wed Dec 17 2003 - 11:13:01 CST