If Tim Cook widely announces what Apple's future philanthropic principles will be, he's giving everyone a chance to decide if they want to own stock in a company which follows those principles. The market will judge that via sales and purchases of Apple stock. What could possibly be more free-market than that?
The idea that (i) the entire value of a company is the NPV of future profits to the shareholders, and that (ii) this fiduciary duty is very broad and bears on all decisions made by the directors, so that any decision that might reduce return is prejudicial to the interest of shareholders, does pretty much entail what the NCPPR claim. And there have been efforts in places to expand fiduciary duty in some jurisdictions to this strong requirement. But I have the impression that lawyers generally think the idea is daft and undermines good corporate governance.
IIRC, Steve Milloy of Junk Science operates a crank activist hedge fund that attempts to undermine environmental innitiatives in the kind of way described in the article. I believe they have produced dismal returns for their investors, which suggests that they do not eat their own dog food.
Today, I think, it is hard to find people who think it is good for companies to be obliged to maximise shareholder value. John Kay, a British economist, journalist and author of the excellent Kay Review , has written very well about the problems of expansive readings of fiduciary responsibility.
: Katz v. Oak Indus., Inc., 508 A.2d 873, 879 (Del. Ch. 1986) judged “It is the obligation of directors to attempt, within the law, to maximize the long-run interests of the corporation’s stockholders." In Long v. Norwood Hills Corp., 380 S.W.2d 451 (Mo. Ct. App. 1964), the court observed: “Plaintiff cites many authorities [including Dodge] to show that the ultimate object of every ordinary trading corporation is the pecuniary gain of its stockholders and that it is for this purpose the capital has been advanced.” - via http://www.professorbainbridge.com/professorbainbridgecom/20...
I could believe that oxygen doesn't exist, and I could probably find somebody else to agree with that, perhaps even an author or something, but if there exists a body of law that is on the books and that will punish you for violating it, the idea of shareholder primacy is very much not a myth.
Dodge v. Ford 1953:
> The Court held that a business corporation is organized primarily for the profit
> of the stockholders, as opposed to the community or its employees. The discretion
> of the directors is to be exercised in the choice of means to attain that end, and
> does not extend to the reduction of profits or the nondistribution of profits among
> stockholders in order to benefit the public, making the profits of the stockholders
> incidental thereto.
This all extends on precedent set way back in 1896 (though there may be earlier) in Steinway v Steinway & Sons, though in the case of Steinway, the philanthropic behavior was excused as having had pecuniary value. It's been cited since, and punishments are being levied in spite of the myth. While it may be true that there is no law codified to speak expressly on the duties of shareholder primacy, stare decisis specifically disagrees with that, and that's really all that matters.
In the real world, of course there is no duty to maximize value at all costs, and the board elects a CEO who will do a good job of balancing short-term value against long-term value, and while actions such as Cook's are likely debatable either way, if we took a more extreme example, and Cook were to give 80% of Apple's assets away to charity, he would very certainly be sued, and he would very certainly lose. If, as in Steinway, the charitable actions could be argued to lead to longer term profits, the case gets blurrier, but the idea that shareholder primacy is a myth that does not exist is simply too unqualified a statement, and too counter to the facts to be regarded with much weight.
The claim I was responding to was this
> "It's actually a myth that a company has to maximize shareholdervalue."
There's plenty of evidence that, myth or not, the courts certainly think that it's real, and if the courts think that it is, then it cannot be a myth.
There is an interesting dynamic here however. Let's suppose arguendo that the sustainability program is money-losing in and of itself -- buying coal-generated electricity is cheaper than maintaining a wind farm (or whatever) even after the subsidies. That doesn't actually mean it has a negative ROI, because the sustainability program is good PR. It builds goodwill that spurs purchases and evangelism. And Apple needs good PR following all that business with the Chinese factory working conditions.
So now here's the trouble. If you're doing green energy for the purposes of public relations, and some troll from the burn more fossil fuels lobby starts asking you about the numbers, you can't come out and say "the numbers don't matter because it's a PR stunt" -- that wouldn't be good PR. You have to give the line about how you run a corporation with a conscience blah blah blah, because that's the line that keeps the yuppies buying Apple hardware. If you come out and say the whole sustainability initiative is to convince Green party voters to buy iPhones made in a city with soupy air in a factory with suicide nets by workers who never leave company property, or downplay the amount of money it costs you to do it, the Green party voters will hear that and not buy as many gadgets from you. The necessary line is to play up how selfless you are in doing all of this, because anything else defeats the premise.
Hmmm, after much consideration, gonna go with ad hominem.
In this case, I think he's saying that because these are politically motivated shareholders, a reasoned answer would be lost on them. Cook could have whipped out a lengthy powerpoint full of charts and figures, or he could have done the chicken dance, or whatever ... he's saying the shareholders are not asking the question in good faith.
edit - Further, saying what you would prefer Cook do if you had asked the question isn't entirely relevant, since presumably you would be asking sincerely. Cook can probably tell those guys are only there to yank his chain and make him look foolish, so unsurprisingly he was somewhat hostile in response.
Incidentally, what logical arguments would you recommend one use against people who have rejected science as a legitimate world view?
If the trolls whine quote Citrine (UK) or Roberts (USA) at them.
And I have used Citrine as away of keeping control of a share holder meeting.
1) You're obviously a troll with a 20 hour old account, so you feel like you need to get trolling early today.
2) You assume that people who disagree with you on some topic have "rejected science as a legitimate world view". You should try to reexamine this assumption, as you may find out it's invalid.
Maybe to see if somebody is interested in statements of fact, you should first try having the statement of fact. And not just say "well, I could drown you in facts, but since you're not worth it, I'd just resort to name calling". That looks rather unconvincing to me.
If Apple had the social and environmental sense of responsibility of GoDaddy, I lot less of us would feel comfortable buying Apple products.