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If a board takes a decision on other grounds and neglects its fiduciary duty to the shareholders, they can sue. This is probably what the people suing feel has

If a board takes a decision on other grounds and neglects its fiduciary duty to the shareholders, they can sue. This is probably what the people suing feel has happened. Of course proving it in court is a different matter. You typically sue to obtain redress for an injury. Firing the board won't make up for their perceived loss.

mixmax 19y ago
Where I'm from you fire the board of directors if you think that they haven't lived up to expectations, or made as much money as you would like them to. You don't sue them for injury. I think this is the best approach for several reasons: 1) The board can actually run the company as they see fit, and not worry about being bankrupted by a hedge fund that sues them because they have a different idea of how to run it. 2) A board constantly keeping to the middle of the road and only taking the choices that are absolutely safe with shareholders stiffle innovation. 3) Control of a company slips from the board to the legal system - which is definitely not good. It is a pretty sad state of affairs - I would never want to be on the board of an American company.
- mercurio 19y ago
  All I'm saying is that you can't take away the right to sue for perceived harm. Its all very well to declare that the US legal system is broken, but its not right to say that the shareholders should not be allowed to sue the board in such cases. Whether the case has merit is precisely the judgement that the courts are there to make.
  - mixmax 19y ago
    "Whether the case has merit is precisely the judgement that the courts are there to make." Excellent point. I can only hope for the outcome :-)
anewaccountname 19y ago
If I get hired to make sandwiches, and I do a really slow job, I get fired, I don't get sued. If the shareholders are worried about spur of the moment things that are damaging to the company, they should grant themselves referendum powers, so that, e.g. here they could have blocked the board.

mixmax 19y ago

Where I'm from you fire the board of directors if you think that they haven't lived up to expectations, or made as much money as you would like them to. You don't sue them for injury. I think this is the best approach for several reasons: 1) The board can actually run the company as they see fit, and not worry about being bankrupted by a hedge fund that sues them because they have a different idea of how to run it. 2) A board constantly keeping to the middle of the road and only taking the choices that are absolutely safe with shareholders stiffle innovation. 3) Control of a company slips from the board to the legal system - which is definitely not good. It is a pretty sad state of affairs - I would never want to be on the board of an American company.

mercurio 19y ago
All I'm saying is that you can't take away the right to sue for perceived harm. Its all very well to declare that the US legal system is broken, but its not right to say that the shareholders should not be allowed to sue the board in such cases. Whether the case has merit is precisely the judgement that the courts are there to make.
- mixmax 19y ago
  "Whether the case has merit is precisely the judgement that the courts are there to make." Excellent point. I can only hope for the outcome :-)

anewaccountname 19y ago

If I get hired to make sandwiches, and I do a really slow job, I get fired, I don't get sued. If the shareholders are worried about spur of the moment things that are damaging to the company, they should grant themselves referendum powers, so that, e.g. here they could have blocked the board.