5 ms·
The company, board of directors still owes a fiduciary duty to minority shareholders. Having 51% of voting control doesn't change that.
by gnopgnip 1y ago
The company, board of directors still owes a fiduciary duty to minority shareholders. Having 51% of voting control doesn't change that.
- philipov 1y agoIf you don't like how a company is being managed, your recourse is to pull your investment.
- jncfhnb 1y agoYou can also work collectively with other shareholders to directly impact the board
- gnopgnip 1y agoThat wouldn't make the investors whole for past violations, which is why they are suing for breach of fiduciary duty.
- philipov 1y agoExcept that there are limits on fiduciary duty. It should not be confused for a right to earn money. Losing money on a bad investment is part of the game. The duty that they have is to carry out the terms of the investment prospectus and nothing more.
- bryanlarsen 1y agoShareholders have the right to not get lied to by executives. The SEC forces companies to put lots of stuff into their annual reports, giving companies lots of opportunities to lie to shareholders. Companies basically write "we aren't doing anything morally ambiguous" in their annual reports, almost always lying when they do so. https://www.bloomberg.com/opinion/articles/2019-06-26/everything-everywhere-is-securities-fraud https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...
- darth_avocado 1y agoExcept that intentionally making bad investments fully knowing that they are bad investments is not something you can put aside as just “bad investments you lost money on”. This is absolutely something the board needs to hold the executive team accountable for and is part of their fiduciary duty.
- lenerdenator 1y agoYou're right, they absolutely should. I bet the chairman, Mark Zuckerberg, is going to steer the board to get right on with punishing the CEO, Mark Zuckerberg, for his careless administration of the company.
- toast0 1y agoIf a manager doesn't want to manage within the law for the benefit of shareholders, their recourse is to purchase all the shares.
- phkahler 1y agoThis. I think the executives have an obligation to state their plans so investors can decide if they want to back it. But if making top dollar is a requirement then lots of companies should liquidate and invest in other companies with higher returns or something.
- v5v3 1y agoActivist investors have always been around. They only pull their investments if they fail.
- immibis 1y agoYou can also sue them, because the law says they have a fiduciary duty towards you.
- pbalau 1y agoNot sure what your point is, the Meta shares are doing great, hence Zuckerberg being in charge of things works.
- jncfhnb 1y agoStock being up doesn’t mean they’re not allowed to voice dissatisfaction
- lcnPylGDnU4H9OF 1y agoBeing allowed to voice something doesn't make the something valid.
- jncfhnb 1y agoHence the legal work, yes
- noqc 1y agoBreach of fiduciary duty is already extremely hard to prove when share prices are down. Mark has the added benefit of the doubt that arises from the fact that his incentives are fundamentally aligned with the company's incentives, given how much of his wealth is tied up in those shares.
- pbalau 1y agoDissatisfaction to what? The reply I answered mentioned the fiduciary duty to all shareholders, but, in my limited understanding of the term, based on how I see the term used, this means the company has an obligation to make moneis for the shareholders. Which Meta does, quite well. Obviously, people can be dissatisfied about anything, but I'm not sure Meta is failing the "fiduciary duty" aspect.
- darth_avocado 1y ago“The stock is up, but it would be up more” - investors
- elcritch 1y agoCan you cite case law for this opinion which would apply to a large public corporation during normal management?
- ajkjk 1y agoyou're asking someone to cite case law for a random post on a forum?
- barbazoo 1y ago> The company, board of directors still owes a fiduciary duty to minority shareholders. Having 51% of voting control doesn't change that. Not OP but they were very confident in what they wrote. I'd assume they'd be able to provide evidence. Just because it's the law doesn't mean we're not gonna get asked for evidence. Maybe we should be more careful with our claims then.
- ajkjk 1y agoYou asked for them to cite case law. Certainly a link to a random article would convince you, though?
- barbazoo 1y agoWhatever is necessary to support the claim > The company, board of directors still owes a fiduciary duty to minority shareholders. Having 51% of voting control doesn't change that. No, not a "random" article, but one that actually did do the homework and check law. Someone has to, otherwise you can't claim to know what the law says.
- ajkjk 1y agodemanding weird standards of proof in a conversation is an annoying thing to do. if you want to know with more confidence maybe take two seconds to google it
- deleted 1y ago
- newsclues 1y agoIs this fiduciary duty to make as much money as possible (who gets to decide what the max is), or just not to scam or steal from your investors?
- mminer237 1y agoEssentially, yes, it's to increase stock value, but generally the courts are to defer to executives' judgment on such decisions as long as the executive is acting in good faith. So in practice you don't have to, like, exploit people or anything as long as you say not exploiting people is good for the long-term health of the company's good will or something.
- v5v3 1y agoAs per that article, it is said they failed to comply with a law. And complying with laws will be a given in most contracts. Making money comes after complying with law and rules.