Re: Oracle's Mission Statement

From: Daniel Morgan <damorgan_at_x.washington.edu>
Date: Mon, 08 Dec 2003 17:50:04 -0800
Message-ID: <1070934639.830191@yasure>

J Alex wrote:

> "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.

Actually I pulled out my copy of Black's which is the only book I have left from those days. I practice computing not law. However since you wish to get into some kind of nonsense over this as opposed to paying legal counsel try the following from a Securities & Exchange Commission web site and I quote:

"... that corporations are expected, wherever possible, to integrate extrinsics with the corporation's primary obligation to maximize shareholder value."

That is the end of this thread for me. If you want more hire an attorney as I will ignore this off-topic thread from here on.

-- 
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 - 19:50:04 CST