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> they are legally bound to maximize shareholder value Can you point to a single instance where a company was forced to commit some act that its managers reaso

> they are legally bound to maximize shareholder value Can you point to a single instance where a company was forced to commit some act that its managers reasonably thought was morally wrong because of the "law" that companies must maximize shareholder value? Personally I think this trope has no basis in fact and cannot explain why Google or any other company is compelled to do things that are wrong. There are many possible reasons why they would do something you disagree with: maybe they don't think it's wrong. Maybe they actively want to do something bad. Maybe you are not correct in your beliefs about what they are doing. But I think the reason you gave why they need to violate people's privacy is a cop out. There are also a number of counter-examples where corporations fail to maximize shareholder profits by donating to charity, taking principled environmental stances, etc. I don't know how you or anyone could come to the conclusion that the U.S. legal system rigidly enforces absolute profit maximization. > Oh, and by the way, the government can have access to all that data without a search warrant. Don't know where you are getting this from.

yequalsx 16y ago
"Can you point to a single instance where a company was forced to commit some act that its managers reasonably thought was morally wrong because of the "law" that companies must maximize shareholder value?" I can point to companies that sell tainted drugs, products that contain lead paint, that dump toxic materials in rivers, do shoddy work on oil wells, etc. They don't do this because they are required to maximize shareholder value. They do it because of their pursuit of money. The difference isn't a meaningful one in my mind. I think if the law was changed and companies were forced to consider societal interest then perhaps things would change for the better. Perhaps not. As it is, the law is a bad one in my opinion.
- tedunangst 16y ago
  "Companies do bad stuff" != "Companies are legally required to do bad stuff".
  - yequalsx 16y ago
    I don't understand the purpose of your post. I didn't come close to claiming otherwise. I'm not claiming otherwise. I provided examples of companies doing bad stuff in the pursuit of money. I opined that a change in the law is needed. The fact that companies doing bad stuff does not equal companies being legally required to bad stuff supports my position. That is, even though there is no law requiring companies to do bad stuff they still sometimes do. I suggested that a change in the law might lead to companies doing bad stuff less frequently. Again, I don't understand the purpose of your post. Can you clarify?
    - jamesaguilar 16y ago
      You responded to a post arguing against the notion that companies are legally required to do things that are wrong for profit. You responded with an argument that many companies had done things wrong for profit, but without proving that they are legally required to do so. So your response was basically irrelevant, and the GP is pointing that out. As a technical matter, there are a number of ways that laws already require companies to consider the broad interests of society. Environmental regulations, taxes, tort law, and various other similar regulations, not to mention the natural pressure that the best interest of society tends to be somewhat compatible with profit, all influence companies to choose the option that is best for society as a whole most of the time. I wonder what specific law you are proposing when you say that laws should be changed to make companies consider the "societal interest."
      - yequalsx 16y ago
        No one is claiming that the law that corporation are required to try to maximize shareholder value is the same thing as requiring companies to do bad things. Some people, me included, are saying that there are unintended consequences with this law and that some companies do bad things in an effort to maximize profit (increase shareholder value). Pointing out that companies doing bad things is not the same thing as legally requiring them to do bad things is a red herring. It's not germane to the discussion at hand.
tomrod 16y ago
Yes, I can. I was employed by such a company and laid off when I made a stink. There is no legal "law" of such: it's an economic reality, however.
amalcon 16y ago
> Can you point to a single instance where a company was forced to commit some act that its managers reasonably thought was morally wrong because of the "law" that companies must maximize shareholder value? Tobacco companies concealing evidence that nicotine is addictive is sort of the textbook case for this, though you are correct that it is not a law as such. Pretty much every corporation has in its charter a mandate to maximize shareholder value within certain constraints.
iamelgringo 16y ago
Can you point to a single instance where a company was forced to commit some act that its managers reasonably thought was morally wrong because of the "law" that companies must maximize shareholder value? Personally I think this trope has no basis in fact and cannot explain why Google or any other company is compelled to do things that are wrong. Really? I'm surprised that you have a problem believing that people who manage companies might do things of dubious moral value in order to maximize profit. But, if you insist... It could be easily argued that BP, Halliburton, et al... maximized shareholder value over environmental safety concerns. http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill The current recession is largely due to financial services companies creating derivatives out of sub prime mortgages. That is, bundling toxic debt and making it look like a AAA rated investment and selling it for profit. http://en.wikipedia.org/wiki/Late-2000s_recession http://en.wikipedia.org/wiki/Late-2000s_recession Enron's "...reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal"" http://en.wikipedia.org/wiki/Enron http://en.wikipedia.org/wiki/Enron Vioxx was a drug that I've seen people die from. It was pushed through the FDA approval process and then withdrawn after people started dying from it. http://en.wikipedia.org/wiki/Rofecoxib http://en.wikipedia.org/wiki/Rofecoxib Classic example of corporations producing and selling a drug that was toxic, leading to thousands of horrible birth defects. http://en.wikipedia.org/wiki/Thalidomide http://en.wikipedia.org/wiki/Thalidomide IBM made a lot of money selling automation systems so the Nazi's could efficiently kill millions in the Holocaust. http://en.wikipedia.org/wiki/IBM_and_the_Holocaust http://en.wikipedia.org/wiki/IBM_and_the_Holocaust Chiquita Brands has admitted to sponsoring terrorist organizations in Latin America http://en.wikipedia.org/wiki/Doe_v._Chiquita_Brands_International http://en.wikipedia.org/wiki/Doe_v._Chiquita_Brands_Internat... > Oh, and by the way, the government can have access to all that data without a search warrant. Don't know where you are getting this from. Really??? If you insist... "Under this program, referred to by the Bush administration as the "terrorist surveillance program", part of the broader President's Surveillance Program, the NSA is authorized by executive order to monitor, without search warrants, phone calls, e-mails, Internet activity, text messaging, and other communication involving any party believed by the NSA to be outside the U.S., even if the other end of the communication lies within the U.S." [1] ref: [1] http://en.wikipedia.org/wiki/NSA_warrantless_surveillance_controversy http://en.wikipedia.org/wiki/NSA_warrantless_surveillance_co...
ford 16y ago
The best (but not the only) example of a corporation acting immorally to maximize shareholder value is Ford. Prior to the release of the Ford Pinto, Ford's managers were fully aware of a design flaw in the Ford Pinto. As most people know, the gas tank on the car made the car explode in a ball of flames if it was involved in a rear end collision. Ford's management compared the costs of a redesign to the costs associated with wrongful death lawsuits resulting from this design flaw. It was cheaper for them to pay the wrongful death lawsuits, so that's the decision that was made. It's very clear that this decision was made in an effort to maximize shareholder value, and did not take ethics into consideration whatsoever. More information on this topic at the link below (Link is "Let Me Duck Duck Go That For You, since DDG is the primary topic of this thread): http://lmddgtfy.com/?q=ford+pinto+lawsuits http://lmddgtfy.com/?q=ford+pinto+lawsuits

yequalsx 16y ago

"Can you point to a single instance where a company was forced to commit some act that its managers reasonably thought was morally wrong because of the "law" that companies must maximize shareholder value?" I can point to companies that sell tainted drugs, products that contain lead paint, that dump toxic materials in rivers, do shoddy work on oil wells, etc. They don't do this because they are required to maximize shareholder value. They do it because of their pursuit of money. The difference isn't a meaningful one in my mind. I think if the law was changed and companies were forced to consider societal interest then perhaps things would change for the better. Perhaps not. As it is, the law is a bad one in my opinion.

tedunangst 16y ago
"Companies do bad stuff" != "Companies are legally required to do bad stuff".
- yequalsx 16y ago
  I don't understand the purpose of your post. I didn't come close to claiming otherwise. I'm not claiming otherwise. I provided examples of companies doing bad stuff in the pursuit of money. I opined that a change in the law is needed. The fact that companies doing bad stuff does not equal companies being legally required to bad stuff supports my position. That is, even though there is no law requiring companies to do bad stuff they still sometimes do. I suggested that a change in the law might lead to companies doing bad stuff less frequently. Again, I don't understand the purpose of your post. Can you clarify?
  - jamesaguilar 16y ago
    You responded to a post arguing against the notion that companies are legally required to do things that are wrong for profit. You responded with an argument that many companies had done things wrong for profit, but without proving that they are legally required to do so. So your response was basically irrelevant, and the GP is pointing that out. As a technical matter, there are a number of ways that laws already require companies to consider the broad interests of society. Environmental regulations, taxes, tort law, and various other similar regulations, not to mention the natural pressure that the best interest of society tends to be somewhat compatible with profit, all influence companies to choose the option that is best for society as a whole most of the time. I wonder what specific law you are proposing when you say that laws should be changed to make companies consider the "societal interest."
    - yequalsx 16y ago
      No one is claiming that the law that corporation are required to try to maximize shareholder value is the same thing as requiring companies to do bad things. Some people, me included, are saying that there are unintended consequences with this law and that some companies do bad things in an effort to maximize profit (increase shareholder value). Pointing out that companies doing bad things is not the same thing as legally requiring them to do bad things is a red herring. It's not germane to the discussion at hand.

tomrod 16y ago

Yes, I can. I was employed by such a company and laid off when I made a stink. There is no legal "law" of such: it's an economic reality, however.

amalcon 16y ago

> Can you point to a single instance where a company was forced to commit some act that its managers reasonably thought was morally wrong because of the "law" that companies must maximize shareholder value? Tobacco companies concealing evidence that nicotine is addictive is sort of the textbook case for this, though you are correct that it is not a law as such. Pretty much every corporation has in its charter a mandate to maximize shareholder value within certain constraints.

iamelgringo 16y ago

Can you point to a single instance where a company was forced to commit some act that its managers reasonably thought was morally wrong because of the "law" that companies must maximize shareholder value? Personally I think this trope has no basis in fact and cannot explain why Google or any other company is compelled to do things that are wrong. Really? I'm surprised that you have a problem believing that people who manage companies might do things of dubious moral value in order to maximize profit. But, if you insist... It could be easily argued that BP, Halliburton, et al... maximized shareholder value over environmental safety concerns. http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill The current recession is largely due to financial services companies creating derivatives out of sub prime mortgages. That is, bundling toxic debt and making it look like a AAA rated investment and selling it for profit. http://en.wikipedia.org/wiki/Late-2000s_recession http://en.wikipedia.org/wiki/Late-2000s_recession Enron's "...reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the "Enron scandal"" http://en.wikipedia.org/wiki/Enron http://en.wikipedia.org/wiki/Enron Vioxx was a drug that I've seen people die from. It was pushed through the FDA approval process and then withdrawn after people started dying from it. http://en.wikipedia.org/wiki/Rofecoxib http://en.wikipedia.org/wiki/Rofecoxib Classic example of corporations producing and selling a drug that was toxic, leading to thousands of horrible birth defects. http://en.wikipedia.org/wiki/Thalidomide http://en.wikipedia.org/wiki/Thalidomide IBM made a lot of money selling automation systems so the Nazi's could efficiently kill millions in the Holocaust. http://en.wikipedia.org/wiki/IBM_and_the_Holocaust http://en.wikipedia.org/wiki/IBM_and_the_Holocaust Chiquita Brands has admitted to sponsoring terrorist organizations in Latin America http://en.wikipedia.org/wiki/Doe_v._Chiquita_Brands_International http://en.wikipedia.org/wiki/Doe_v._Chiquita_Brands_Internat... > Oh, and by the way, the government can have access to all that data without a search warrant. Don't know where you are getting this from. Really??? If you insist... "Under this program, referred to by the Bush administration as the "terrorist surveillance program", part of the broader President's Surveillance Program, the NSA is authorized by executive order to monitor, without search warrants, phone calls, e-mails, Internet activity, text messaging, and other communication involving any party believed by the NSA to be outside the U.S., even if the other end of the communication lies within the U.S." [1] ref: [1] http://en.wikipedia.org/wiki/NSA_warrantless_surveillance_controversy http://en.wikipedia.org/wiki/NSA_warrantless_surveillance_co...

ford 16y ago

The best (but not the only) example of a corporation acting immorally to maximize shareholder value is Ford. Prior to the release of the Ford Pinto, Ford's managers were fully aware of a design flaw in the Ford Pinto. As most people know, the gas tank on the car made the car explode in a ball of flames if it was involved in a rear end collision. Ford's management compared the costs of a redesign to the costs associated with wrongful death lawsuits resulting from this design flaw. It was cheaper for them to pay the wrongful death lawsuits, so that's the decision that was made. It's very clear that this decision was made in an effort to maximize shareholder value, and did not take ethics into consideration whatsoever. More information on this topic at the link below (Link is "Let Me Duck Duck Go That For You, since DDG is the primary topic of this thread): http://lmddgtfy.com/?q=ford+pinto+lawsuits http://lmddgtfy.com/?q=ford+pinto+lawsuits