Re: Oracle's Mission Statement

"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.

> And that failure to do so constitutes a breach of a fiduciary
> duty defined by the U.S. Securities and Exchange Commission.
>
> A two minute search of the web with Google returned a few links that
> while not being "legal advice" should give you a sense of it. The search
> criteria was ["Maximize Shareholder Value" AND "SEC"]. So feel free to
> look yourself these all came off the first page and Google returned 2750
> hits so there are plenty more.
>
> http://www.sec.gov/news/speech/speecharchive/1999/spch335.htm
> http://www.freddiemac.com/speeches/parseghian/gp082003.html
> http://www.mossadams.com/services/sec/strategic.htm
> http://www.ispcorp.com/archive/news/f_news45.html
> http://www.herc.com/abouthercules/news/01/Response.htm
>

http://www.findarticles.com/cf_dls/m4PRN/2001_April_6/72869494/p1/article.jhtml
>
> Search each returned page for the word "maximize." Two years of law
> school was not wasted on me. Though I will admit that it was painful.
>

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". Received on Sun Dec 07 2003 - 21:07:04 CST