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A 2010 decision, for example, eBay Domestic Holdings Inc. v. Newmark, held that corporate directors are bound by "fiduciary duties and standards" which include

A 2010 decision, for example, eBay Domestic Holdings Inc. v. Newmark, held that corporate directors are bound by "fiduciary duties and standards" which include "acting to promote the value of the corporation for the benefit of its stockholders." http://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/a-duty-to-shareholder-value http://www.nytimes.com/roomfordebate/2015/04/16/what-are-cor... Under US law there would be a problem if he did that.

nabla9 10y ago
I don't see how his interests are separate from promoting the value of the corporation. His approach is just very risky. Hyping investors to take too much risk is OK unless he intentionally hides something and don't put it in financial statements.
mrfusion 10y ago
If a CEO genuinely believed climate change was an existential threat wouldnt actions to mitigate it be acting in the interest of the shareholders even if the company loses money?
- kgwgk 10y ago
  And if he genuinely believed that the world was coming to an end unless he sacrificed a newborn every midnight, would the killings be in the interest of the shareholders?
- deleted 10y ago
  [deleted]
- firethief 10y ago
  I don't think that follows. It would be in the interest of the shareholders for _someone_ to address the problem, but it would not be in their interest to volunteer to foot the bill.
  - avmich 10y ago
    It's not clear. If nobody else addresses the problem, or if someone else does it only with condition that this company also participates, or if not enough of others is working on it - in all these cases, and others, footing the bill could be beneficial for shareholders.
matt4077 10y ago
First of all, that's New Jersey law, and does not apply to everyone (though NJ is a favorite location for corporate HQs). Secondly, that case only went as far as it did because Craig Newmark was very open to say "we believe this is good for society and we're willing and expecting to loose money on it" Under normal circumstances, CXOs have wide discretion in interpreting what is beneficial for their companies. Case in point: contributions to political campaigns, contributions to non-profits, investment in clean energy or lead-free production etc. The assumption is usually that shareholders are in a better position to judge such actions so the courts defer to their votes.

nabla9 10y ago

I don't see how his interests are separate from promoting the value of the corporation. His approach is just very risky. Hyping investors to take too much risk is OK unless he intentionally hides something and don't put it in financial statements.

mrfusion 10y ago

If a CEO genuinely believed climate change was an existential threat wouldnt actions to mitigate it be acting in the interest of the shareholders even if the company loses money?

kgwgk 10y ago
And if he genuinely believed that the world was coming to an end unless he sacrificed a newborn every midnight, would the killings be in the interest of the shareholders?
deleted 10y ago
[deleted]
firethief 10y ago
I don't think that follows. It would be in the interest of the shareholders for _someone_ to address the problem, but it would not be in their interest to volunteer to foot the bill.
- avmich 10y ago
  It's not clear. If nobody else addresses the problem, or if someone else does it only with condition that this company also participates, or if not enough of others is working on it - in all these cases, and others, footing the bill could be beneficial for shareholders.

matt4077 10y ago

First of all, that's New Jersey law, and does not apply to everyone (though NJ is a favorite location for corporate HQs). Secondly, that case only went as far as it did because Craig Newmark was very open to say "we believe this is good for society and we're willing and expecting to loose money on it" Under normal circumstances, CXOs have wide discretion in interpreting what is beneficial for their companies. Case in point: contributions to political campaigns, contributions to non-profits, investment in clean energy or lead-free production etc. The assumption is usually that shareholders are in a better position to judge such actions so the courts defer to their votes.