Apple backs move to make corporations accountable to citizens, not shareholders

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Comments

  • Reply 21 of 67
    Rayz2016Rayz2016 Posts: 6,957member
    Feel-good nonsense. Tim needs to turn over the CEO spot if he can’t keep his focus on product and innovation.

    Unfortunately, there’s more to running a tech behemoth than product and innovation. There’s customers, employees, and seeing opportunities to take control from the so-called analysts and experts spinning their bullshit on Wall Street. 

    But you don run a tech behemoth, so no one is really expecting you to know that. 
    StrangeDaysmontrosemacslostkiwi
  • Reply 22 of 67
    GeorgeBMacGeorgeBMac Posts: 11,421member
    Corporations have a responsibility to a number of people and groups:
    -- Shareholders
    -- Employees
    -- Vendors
    -- Customers
    -- The society that makes their organization possible and supports it with laws, infrastructure and stability
    avon b7StrangeDays
  • Reply 23 of 67
    JWSCJWSC Posts: 1,203member
    davgreg said:
    There was once a time when a corporation could not exist beyond the time of a human lifespan and there is some merit to that concept. 

    Imagine the creativity and competition that could be unleashed by putting a shelf life date on every corporation. It would change every market and encourage startups. It would change the priorities of the leadership and investors.
    The Dutch East India Company was around for a couple centuries.  But they eventually faded out on their own.

    It’s unclear from your post what benefits might be had by society from forcing an arbitrary end date onto a company.  Seems you might be setting people with worthy employment up for early and unnecessary termination.
    edited August 2019 SpamSandwichmuthuk_vanalingam
  • Reply 24 of 67
    dysamoriadysamoria Posts: 3,430member
    Corporations have a responsibility to a number of people and groups:
    -- Shareholders
    -- Employees
    -- Vendors
    -- Customers
    -- The society that makes their organization possible and supports it with laws, infrastructure and stability
    Notice you still listed shareholders first.
  • Reply 25 of 67
    dewmedewme Posts: 5,537member
    This is primarily aspirational but it’s noble for CEOs to recognize that their community of stakeholders includes more than their shareholders. Because of this important distinction we shouldn’t jump to the conclusion that it’s a zero sum game and shareholders will somehow be shortchanged by the expanded focus.

    Some of the key stakeholder groups that must be part of the expanded consideration are employees, suppliers, and neighbors. Too often members of these groups are thrown under the bus in the quest for profits and shareholder value. Yes, investors should profit from their subsidies in businesses, but profitability should never be an excuse for diminishing the quality of life of the larger set of stakeholders. But again, this is also aspirational and history has taught us that reality and aspiration do not always converge. In the end, money almost always determines the outcome. 
    muthuk_vanalingam
  • Reply 26 of 67
    SpamSandwichSpamSandwich Posts: 33,407member
    georgie01 said:
    maestro64 said:
    ...
    As the saying going as long as you are using other people's money they get to decide how you spend that money. You can not take other people's money and then ignore them. 

    ... If investors/venture capitalist think they will not have a front and only seat at the show, they will not bring their resources to new companies looking to get off the ground and grow. It is going to be very hard to have startups who can not be focus those who give them money and all about everything else for everyone else.
    This is an important post.

    I don’t like companies focusing on benefitting shareholders who are in it solely to make money, but good intentions don’t automatically solve problems. We need to always consider reality rather then just assume our well-meaning intentions will make the world better. Contrary to popular belief, people are not basically ‘good’. People are ultimately self serving, and we as a culture are getting worse and worse (so obviously seen in things like ‘someone feels a particular way and so let’s all defy science and common sense to affirm that person’s feelings’).

    It seems to me that taking away shareholder incentive will take away shareholder investment which will harm startups and businesses needing money.
    The shareholders vote on who makes up the board of directors and other measures put before shareholders. Publicly held companies ARE answerable to the shareholders.
  • Reply 27 of 67
    dysamoriadysamoria Posts: 3,430member
    How, exactly, is “signing on” going to accomplish anything at all? It’s just words. PR. In fact, it’s kind of insulting to see Apple make this move since we’ve been watching them degrade Apple’s “soul” (for lack of a better term) with exactly the behavior they claim they don’t like by signing on to this initiative.

    The ACTUAL core problem is the very existence of shareholders; the stock market is the problem.

    Now watch the people who believe in the market with the tenacity of religion come swooping in to tell me why we can never get rid of the stock market... Such people have been acculturated to what they think is normal and necessary, because it’s all they’ve ever known and they think it must therefore be good.
    muthuk_vanalingam
  • Reply 28 of 67
    Vacuous, feel-good fluff. The good companies are already good at taking care of stakeholders. But they had to start doing well first. 

    More importantly, the law in the US is clear: the primary purpose of a publicly traded corporation is to maximize profits (and by extension, shareholder value). This is also what the Board of Directors is required to do: that is their fiduciary obligation. 

    Companies that do not want to do this can incorporate as “B Corps” as some have done (e.g., Patagonia, Ben & Jerry’s). 
    muthuk_vanalingam
  • Reply 29 of 67
    StrangeDaysStrangeDays Posts: 12,957member
    avon b7 said:
    avon b7 said:
    Best intentions won't go very far if there is no framework for accountability and comparison.
    Where are they advocating either of those things?
    Remember, I'm being cynical here. Intentions, guidelines, policies, practices or whatever you want to call them aren't worth much unless there is an agreed framework to be able to compare what different companies are doing.

    Nothing needs to be specifically advocated by them.
    Disagree. Cultural values are identified and popularized as ideas by the culture involved. If you don't have advocacy, you don't have anything.
    tmayAppleExposed
  • Reply 30 of 67
    StrangeDaysStrangeDays Posts: 12,957member

    JWSC said:

    No matter what your political stripes, this is an absolute good.  But corporate behavior will only change when internal incentives change.  If salary increases and bonuses continue to be tied to stock performance this statement means nothing.  Follow through is everything.

    Agreed. The standard practices of millionaire board memberships hiring other millionaires and giving them millionaire golden parachutes (while routinely screwing workers) must end.
    tmayFileMakerFellerlostkiwi
  • Reply 31 of 67
    StrangeDaysStrangeDays Posts: 12,957member

    Feel-good nonsense. Tim needs to turn over the CEO spot if he can’t keep his focus on product and innovation.
    ^^^^ The very sort of person who got us into this mess. Short-term thinker, afraid of being responsible to the community, the workers, and advocating respect for all.
    tmaymontrosemacsfastasleep
  • Reply 32 of 67
    StrangeDaysStrangeDays Posts: 12,957member
    Corporations have a responsibility to a number of people and groups:
    -- Shareholders
    -- Employees
    -- Vendors
    -- Customers
    -- The society that makes their organization possible and supports it with laws, infrastructure and stability
    This guy gets it.
  • Reply 33 of 67
    StrangeDaysStrangeDays Posts: 12,957member

    More importantly, the law in the US is clear: the primary purpose of a publicly traded corporation is to maximize profits (and by extension, shareholder value). This is also what the Board of Directors is required to do: that is their fiduciary obligation. 

    Companies that do not want to do this can incorporate as “B Corps” as some have done (e.g., Patagonia, Ben & Jerry’s). 
    And there is some serious push-back to this industrial-age mentality. About adopting doctrine that requires public companies to involve its workers and stakeholders beyond the investor alone. That's what this entire conversation is all about. It begins with words.
    JWSCFileMakerFellerlostkiwi
  • Reply 34 of 67
    AppleZuluAppleZulu Posts: 2,091member
    georgie01 said:
    maestro64 said:
    ...
    As the saying going as long as you are using other people's money they get to decide how you spend that money. You can not take other people's money and then ignore them. 

    ... If investors/venture capitalist think they will not have a front and only seat at the show, they will not bring their resources to new companies looking to get off the ground and grow. It is going to be very hard to have startups who can not be focus those who give them money and all about everything else for everyone else.
    This is an important post.

    I don’t like companies focusing on benefitting shareholders who are in it solely to make money, but good intentions don’t automatically solve problems. We need to always consider reality rather then just assume our well-meaning intentions will make the world better. Contrary to popular belief, people are not basically ‘good’. People are ultimately self serving, and we as a culture are getting worse and worse (so obviously seen in things like ‘someone feels a particular way and so let’s all defy science and common sense to affirm that person’s feelings’).

    It seems to me that taking away shareholder incentive will take away shareholder investment which will harm startups and businesses needing money.
    There's a difference between taking away shareholder incentive and positioning shareholder interest as one -but not the only one- of a company's obligations. 

    Shareholder interests are ultimately served when a company seeks to do right by its customers, its employees, the community and country or countries which provide infrastructure, employees, a place to thrive, customers, and so forth. 

    A major problem of corporate governance in recent times has been a singular pursuit of short term shareholder interests, often at the expense of all those other things. That pursuit results in companies seeking to externalize all sorts of costs in order to get an immediate return. Unfortunately, externalized corporate costs come in the form of things like environmental damage, underpaid employees who have no personal loyalty or investment in the company, degraded infrastructure, a poorly educated workforce, and a customer base less and less able to afford a company's products.  That's a fundamentally stupid way to run a business, but there are too many MBAs out there who think Gordon Gekko was the hero in the movie Wall Street.

    It's actually possible to run a healthy company that grows at a slow but steady pace or that doesn't even grow at all, but instead makes good money just doing the thing it does well. The best pizza places are the local landmarks that always do a hopping business but know that you can't franchise papa's secret recipe. The worst pizza comes from the corporate chains that sell pizza made from a recipe written on a spreadsheet. The former is always rebuffing investors who want to make everybody rich. The latter is always coming up with the next gimmick to keep up with the other guys, because everybody knows the box tastes better than the pizza. The former thrives for generations. The latter is sometimes very profitable, but always just a couple of bad quarterly earnings reports away from total collapse. 

    Applying that to Apple, it's worth noting that they're rarely pursuing market share, they don't make products designed to be all things for all people, and while they have shown consistent and considerable growth, they're not a company that does a lot of stupid things just to punch up the quarterly report. 
    edited August 2019 tmayGeorgeBMaclostkiwi
  • Reply 35 of 67
    JWSCJWSC Posts: 1,203member
    georgie01 said:
    maestro64 said:
    ...
    As the saying going as long as you are using other people's money they get to decide how you spend that money. You can not take other people's money and then ignore them. 

    ... If investors/venture capitalist think they will not have a front and only seat at the show, they will not bring their resources to new companies looking to get off the ground and grow. It is going to be very hard to have startups who can not be focus those who give them money and all about everything else for everyone else.
    This is an important post.

    I don’t like companies focusing on benefitting shareholders who are in it solely to make money, but good intentions don’t automatically solve problems. We need to always consider reality rather then just assume our well-meaning intentions will make the world better. Contrary to popular belief, people are not basically ‘good’. People are ultimately self serving, and we as a culture are getting worse and worse (so obviously seen in things like ‘someone feels a particular way and so let’s all defy science and common sense to affirm that person’s feelings’).

    It seems to me that taking away shareholder incentive will take away shareholder investment which will harm startups and businesses needing money.
    The shareholders vote on who makes up the board of directors and other measures put before shareholders. Publicly held companies ARE answerable to the shareholders.

    Everyone here is aware of that.  But you’re missing the point.

    The laws enshrining the notion of fiduciary responsibility are relatively modern and not based upon historical practices.  Theses laws have had the perverse effect of incentivizing companies to devise annual bonus plans that are tied to stock market performance.  Managers who’s annual bonuses are tied to stock performance will do anything to make their numbers, regardless of the impact to the business down the road.  These incentives have also served to accelerate the off-shoring of industrial capacity, as managers will shut down a US factory in a heartbeat if it saves a few pennies on product cost, allowing them to get bonuses for the cost savings effort.  This is a company eating its own, with damaging effects all around.

    Shareholders are not experts at running a company - any company.  Reacting to their near term wants and needs is a great way to drive a company into the ground.  This has been demonstrated repeatedly in the real world.  I have seen the idiocy this end of quarter scramble generates myself.  It is harmful to the long term health of a company, let alone other stakeholders, who haven’t had much of a voice.

    AppleZulutmaylostkiwi
  • Reply 36 of 67
    AppleZuluAppleZulu Posts: 2,091member
    Vacuous, feel-good fluff. The good companies are already good at taking care of stakeholders. But they had to start doing well first. 

    More importantly, the law in the US is clear: the primary purpose of a publicly traded corporation is to maximize profits (and by extension, shareholder value). This is also what the Board of Directors is required to do: that is their fiduciary obligation. 

    Companies that do not want to do this can incorporate as “B Corps” as some have done (e.g., Patagonia, Ben & Jerry’s). 
    No, they had to take care of stakeholders first, in order to do well. Simply maximizing profit before any other considerations is a dumb way to run a company. When you do that, you just start making widgets. Whatever will punch up the quarterly earnings report, just make that. Too many MBAs drink that kool-aid and quit caring about what the company makes or does, and ultimately drive it into the ground. 

    Maximizing profits in the long-term, however, is where good companies understand what they're doing, who they're serving, and how to run a company that will succeed in good times and weather the bad. Those companies take care of their stakeholders first, and their shareholders reap the long-term benefit.
    edited August 2019 tmay
  • Reply 37 of 67
    maestro64maestro64 Posts: 5,043member
    Here is another thing people do not realize and why company who are hurting spend so much time on shareholder value. When you are publicly traded company, your stock price allows/value you to borrow money of leverage the overall business. Without a good valuation companies run into lots of problem in the world of finances. It is great if you never have to borrow money, but when you do you want the best deal. Apple burrow lots of money even when they had money in the Bank, they issued all those bonds so they can buy back shares and pay dividends to its shareholders. What do you think would have happen is Apple did not pay a dividend and buy back share and just kept putting money in the bank. Apple got lucky with the new tax code and allow them to bring back all the over seas money without having to huge taxes. 


    Companies do not have to be a publicly trade company, they could stay private and deal with banks if they need money to grow, but banks are far more restrictive than the stock market. 
  • Reply 38 of 67
    JWSCJWSC Posts: 1,203member
    dysamoria said:
    [...]

    The ACTUAL core problem is the very existence of shareholders; the stock market is the problem.

    [...]
    It isn’t the stock market that is the problem.  It is the laws governing fiduciary responsibility that have created this mess.  Talk to your congressman / congresswoman.
    FileMakerFeller
  • Reply 39 of 67
    entropysentropys Posts: 4,221member

    JWSC said:

    No matter what your political stripes, this is an absolute good.  But corporate behavior will only change when internal incentives change.  If salary increases and bonuses continue to be tied to stock performance this statement means nothing.  Follow through is everything.

    Agreed. The standard practices of millionaire board memberships hiring other millionaires and giving them millionaire golden parachutes (while routinely screwing workers) must end.
    The people signing this most definitely do not have that idea in mind. It’s about staying in charge. The modern equivalent of the king throwing coins to the peasants as he passes.

    What it really is is a barrier to entry to new competitors. Established wealthy corporations can do this. Newer ons get strangled by the associated frameworks and reporting processes set up to the advantage of the established corporations with large corporate and PR departments.  At the very least, if a young start up didn’t report how it complies, say only because it can’t employ an army of compliance officers, the “curated” media (by the established corporate giants) will eat them alive.
    JWSCtmaymuthuk_vanalingam
  • Reply 40 of 67
    JWSCJWSC Posts: 1,203member

    JWSC said:

    No matter what your political stripes, this is an absolute good.  But corporate behavior will only change when internal incentives change.  If salary increases and bonuses continue to be tied to stock performance this statement means nothing.  Follow through is everything.

    Agreed. The standard practices of millionaire board memberships hiring other millionaires and giving them millionaire golden parachutes (while routinely screwing workers) must end.
    Agreed also.  But I’m not holding my breath for that one.
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