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More than that, public companies have obligation to maximise profits for their shareholders as long as they are following the letter of law. There is not much c

More than that, public companies have obligation to maximise profits for their shareholders as long as they are following the letter of law. There is not much choice here, they can't pay even if they wanted unless they can show this is somehow in shareholders' best interest.

pbhjpbhj 8y ago
>public companies have obligation to maximise profits for their shareholders // They're not. Not in EU or USA at least. So, not they aren't under any obligation to be shitty to the public by diminishing tax paid in the countries they operate in. Anyone posting an attempted contradiction should cite the relevant laws making it a legal requirement for companies to maximise profits [above any [other] moral consideration].
- robdachshund 8y ago
  Jello Biafra v. Dead Kennedys is an example of this. Singer lost most of his rights to his music because he didn't want to do a Levi's ad. Since he ran the label the band was on, they sued him for lost profits. He lost.
- lmilcin 8y ago
  Well. The law does not say that the reason for company to exist is to bring profit. In that you are correct, there is no legal requirement for companies to maximise profits. For example, in Delaware, company may be formed for "any lawful business or purpose". Now, once the "business and purpose" of the company is defined to be profit for the shareholders the company has fiduciary duty to perform in the "best interest" of the company and its shareholders as defined by this mission statement. As long as paying minimum tax serves the best interest of company that is brought for profit of its shareholders then that's what the company is bound to do. As I mentioned, it is possible that pure monetary value is not the best interest in the company. That's why, for example, companies spend on image building, because it believes it is in the best interest for the company and the shareholder in achieving long term mission of bringing profit (as long as the mission is "for profit"). The company may build local school or feed poor children in Africa, as long as it serves the best interest of the company and shareholders as defined by its mission. "In a famous 1970 article in The New York Times Magazine, Milton Friedman wrote that the “great virtue” of the shareholder wealth maximization norm is that “it forces people to be responsible for their own actions and makes it difficult for them to ‘exploit’ other people for either selfish or unselfish purposes.”" (https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/a-duty-to-shareholder-value https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...) The way I understand it is US, the people, who decide what is in the best interest of the companies. We have power to decide that being pro-environment is in the best interest of every company and we also have power to make it in the future the best interest of every company to pay taxes. But now that the standards are set, at any given point in time, the officers of the company have obligation to serve in its best interest and we only have ourselves to blame for allowing this to continue be the best interest of the company.
  - vonmoltke 8y ago
    > Now, once the "business and purpose" of the company is defined to be profit for the shareholders the company has fiduciary duty to perform in the "best interest" of the company and its shareholders as defined by this mission statement. Absolutely not. Here are the fiduciary duties of corporate management: https://www.nolo.com/legal-encyclopedia/fiduciary-responsibility-corporations.html https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi... The closest that comes to your assertion is the "Fiduciary Duty of Loyalty" and that states managers must put the best interests of the corporation (note, not just the shareholders) above their own. In general, the management of corporations in the US has significant leeway (from a legal standpoint) in deciding how best to run their corporation. If the board doesn't like the choices upper management is making, their recourse is to fire upper management. Furthermore, the standard you are asserting is legally ludicrous. Not every shareholder has the same "best interest". There is no litigable standard of "best", thus no way of holding executives legally responsible for actions they didn't take. Additionally, such a standard would open up people to civil consequences merely for being bad at their job. > "In a famous 1970 article in The New York Times Magazine, Milton Friedman wrote that the “great virtue” of the shareholder wealth maximization norm is that “it forces people to be responsible for their own actions and makes it difficult for them to ‘exploit’ other people for either selfish or unselfish purposes.”" (https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...) That was Friedman's opinion. It was never substantiated by any statute or case law.

pbhjpbhj 8y ago

>public companies have obligation to maximise profits for their shareholders // They're not. Not in EU or USA at least. So, not they aren't under any obligation to be shitty to the public by diminishing tax paid in the countries they operate in. Anyone posting an attempted contradiction should cite the relevant laws making it a legal requirement for companies to maximise profits [above any [other] moral consideration].

robdachshund 8y ago
Jello Biafra v. Dead Kennedys is an example of this. Singer lost most of his rights to his music because he didn't want to do a Levi's ad. Since he ran the label the band was on, they sued him for lost profits. He lost.
lmilcin 8y ago
Well. The law does not say that the reason for company to exist is to bring profit. In that you are correct, there is no legal requirement for companies to maximise profits. For example, in Delaware, company may be formed for "any lawful business or purpose". Now, once the "business and purpose" of the company is defined to be profit for the shareholders the company has fiduciary duty to perform in the "best interest" of the company and its shareholders as defined by this mission statement. As long as paying minimum tax serves the best interest of company that is brought for profit of its shareholders then that's what the company is bound to do. As I mentioned, it is possible that pure monetary value is not the best interest in the company. That's why, for example, companies spend on image building, because it believes it is in the best interest for the company and the shareholder in achieving long term mission of bringing profit (as long as the mission is "for profit"). The company may build local school or feed poor children in Africa, as long as it serves the best interest of the company and shareholders as defined by its mission. "In a famous 1970 article in The New York Times Magazine, Milton Friedman wrote that the “great virtue” of the shareholder wealth maximization norm is that “it forces people to be responsible for their own actions and makes it difficult for them to ‘exploit’ other people for either selfish or unselfish purposes.”" (https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/a-duty-to-shareholder-value https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...) The way I understand it is US, the people, who decide what is in the best interest of the companies. We have power to decide that being pro-environment is in the best interest of every company and we also have power to make it in the future the best interest of every company to pay taxes. But now that the standards are set, at any given point in time, the officers of the company have obligation to serve in its best interest and we only have ourselves to blame for allowing this to continue be the best interest of the company.
- vonmoltke 8y ago
  > Now, once the "business and purpose" of the company is defined to be profit for the shareholders the company has fiduciary duty to perform in the "best interest" of the company and its shareholders as defined by this mission statement. Absolutely not. Here are the fiduciary duties of corporate management: https://www.nolo.com/legal-encyclopedia/fiduciary-responsibility-corporations.html https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi... The closest that comes to your assertion is the "Fiduciary Duty of Loyalty" and that states managers must put the best interests of the corporation (note, not just the shareholders) above their own. In general, the management of corporations in the US has significant leeway (from a legal standpoint) in deciding how best to run their corporation. If the board doesn't like the choices upper management is making, their recourse is to fire upper management. Furthermore, the standard you are asserting is legally ludicrous. Not every shareholder has the same "best interest". There is no litigable standard of "best", thus no way of holding executives legally responsible for actions they didn't take. Additionally, such a standard would open up people to civil consequences merely for being bad at their job. > "In a famous 1970 article in The New York Times Magazine, Milton Friedman wrote that the “great virtue” of the shareholder wealth maximization norm is that “it forces people to be responsible for their own actions and makes it difficult for them to ‘exploit’ other people for either selfish or unselfish purposes.”" (https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...) That was Friedman's opinion. It was never substantiated by any statute or case law.