4 ms·

"Forced to", "had to" doesn't strike me as appropriate language. These are choices - some in reaction to threats or bans but many entirely speculative/pre-empt

by htfu 7y ago

"Forced to", "had to" doesn't strike me as appropriate language. These are choices - some in reaction to threats or bans but many entirely speculative/pre-emptive.

blueboo 7y ago
Publicly shared companies have a legal obligation to make money for their shareholders. If a stakeholder in a major market can influence whether or not these companies can make their revenue forecast (and therefore making institutional investors' pensions solvent and individuals' mortgage payments payable) then yes, they can force such companies to capitulate to them. The third forcing function to reckon with -- the moral duty to uphold Western countries' increasingly nebulous, compromised values -- has barely any leverage in this equation. What is a responsible, law-abiding executive supposed to do?...
- axaxs 7y ago
  This is often repeated, in part because of some dubious behavior between Ford and the Dodge brothers, but not precisely true. "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so." See: https://www.lawschool.cornell.edu/academics/clarke_business_law_institute/corporations-and-society/Common-Misunderstandings-About-Corporations.cfm https://www.lawschool.cornell.edu/academics/clarke_business_... and the linked Hobby Lobby case opinion.
  - blueboo 7y ago
    Hair-splitting. The obligation is enshrined in law. Shareholders invoke it. The consequences are a change in leadership, not jail. To quote the linked opinion: > In nearly all legal jurisdictions, disinterested and informed directors have the discretion to act in what they believe to be the interest of the business corporate entity, even if this differs from maximizing profits for present shareholders. This is a perfect example. Western companies are antagonizing their US market in favor of developing a future Chinese one.
    - axaxs 7y ago
      It's not, though. To counter your original point, a corporation could decide to not appease China, even if it means a loss in profits. They could justify it any number of ways, saying the US market may be more valuable to their company, or that trade tensions with China make things unstable. There is no legal basis forcing companies to appease China.
      - jjeaff 7y ago
        Exactly. And even if there was a legal obligation to make money at all costs, it could easily be argued that kowtowing to China is a short term strategy with severe long term consequences. You might make more money now, but that will be negated when they steal your IP and the government siezes your property.
- ineedasername 7y ago
  No, companies are not legally required to maximize profits, and certainly not through every available method. Shareholders might disagree with a less profitable decision, and shareholders may band together to force different actions, but this is a matter of corporate governance, not legal mandate. There are in fact for-profit "benefit corporations" whose explicit goal is something other than shareholder profitability. Even if your claims was correct, it wouldn't mean companies had to give in to China's demands. They might reasonably argue that it benefited short term profitability at the cost of long term profitability or even the viability of the business itself. In short, companies have plenty of legal leeway in determining their actions without profit being the sole motivator.
- jrd259 7y ago
  Downvoters: blueboo's post violates no rules. If you disagree with him, refute him, don't simply downvote.
  - jjeaff 7y ago
    That's not how down voting is supposed to work on hn. The rules explicitly permit downvoting if you disagree. They do, however prohibit complaining about downvotes.
- htfu 7y ago
  You're misreading me. Folding in the face of an ultimatum is disappointing but hardly unexpected, and "force" mostly makes sense as a description for it. Pressured or compelled (although almost the same) would seem a bit more apt maybe, but I'm not that picky. My actual point was that angry noise in People's Daily isn't a concrete demand and cannot be said to have "forced" a company the size of Apple. China's end goal (and the real danger here) being implicit threats and vaguely defined often shifting red lines, with an unpredictable severity of response, scaring most to not just reign in everything possibly controversial before anything's even happened, but do it twice as hard just to be safe.

by htfu 7y ago

"Forced to", "had to" doesn't strike me as appropriate language. These are choices - some in reaction to threats or bans but many entirely speculative/pre-emptive.

blueboo 7y ago

Publicly shared companies have a legal obligation to make money for their shareholders. If a stakeholder in a major market can influence whether or not these companies can make their revenue forecast (and therefore making institutional investors' pensions solvent and individuals' mortgage payments payable) then yes, they can force such companies to capitulate to them. The third forcing function to reckon with -- the moral duty to uphold Western countries' increasingly nebulous, compromised values -- has barely any leverage in this equation. What is a responsible, law-abiding executive supposed to do?...

axaxs 7y ago
This is often repeated, in part because of some dubious behavior between Ford and the Dodge brothers, but not precisely true. "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so." See: https://www.lawschool.cornell.edu/academics/clarke_business_law_institute/corporations-and-society/Common-Misunderstandings-About-Corporations.cfm https://www.lawschool.cornell.edu/academics/clarke_business_... and the linked Hobby Lobby case opinion.
- blueboo 7y ago
  Hair-splitting. The obligation is enshrined in law. Shareholders invoke it. The consequences are a change in leadership, not jail. To quote the linked opinion: > In nearly all legal jurisdictions, disinterested and informed directors have the discretion to act in what they believe to be the interest of the business corporate entity, even if this differs from maximizing profits for present shareholders. This is a perfect example. Western companies are antagonizing their US market in favor of developing a future Chinese one.
  - axaxs 7y ago
    It's not, though. To counter your original point, a corporation could decide to not appease China, even if it means a loss in profits. They could justify it any number of ways, saying the US market may be more valuable to their company, or that trade tensions with China make things unstable. There is no legal basis forcing companies to appease China.
    - jjeaff 7y ago
      Exactly. And even if there was a legal obligation to make money at all costs, it could easily be argued that kowtowing to China is a short term strategy with severe long term consequences. You might make more money now, but that will be negated when they steal your IP and the government siezes your property.
ineedasername 7y ago
No, companies are not legally required to maximize profits, and certainly not through every available method. Shareholders might disagree with a less profitable decision, and shareholders may band together to force different actions, but this is a matter of corporate governance, not legal mandate. There are in fact for-profit "benefit corporations" whose explicit goal is something other than shareholder profitability. Even if your claims was correct, it wouldn't mean companies had to give in to China's demands. They might reasonably argue that it benefited short term profitability at the cost of long term profitability or even the viability of the business itself. In short, companies have plenty of legal leeway in determining their actions without profit being the sole motivator.
jrd259 7y ago
Downvoters: blueboo's post violates no rules. If you disagree with him, refute him, don't simply downvote.
- jjeaff 7y ago
  That's not how down voting is supposed to work on hn. The rules explicitly permit downvoting if you disagree. They do, however prohibit complaining about downvotes.
htfu 7y ago
You're misreading me. Folding in the face of an ultimatum is disappointing but hardly unexpected, and "force" mostly makes sense as a description for it. Pressured or compelled (although almost the same) would seem a bit more apt maybe, but I'm not that picky. My actual point was that angry noise in People's Daily isn't a concrete demand and cannot be said to have "forced" a company the size of Apple. China's end goal (and the real danger here) being implicit threats and vaguely defined often shifting red lines, with an unpredictable severity of response, scaring most to not just reign in everything possibly controversial before anything's even happened, but do it twice as hard just to be safe.