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

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Comments

  • Reply 41 of 67

    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.
    I don't think there is much serious or systematic pushback (but I'd love to be proven wrong on that -- do tell me more).

    This conversation is not new. In the US, over the past century, the pendulum has swung in the stakeholder direction at least a couple of times, the most famous being in the 1930s, as enshrined in the famous "Berle-Dodd debate". Outside the US, especially in non-Anglo American systems of corporate governance (e.g., Germany, France, Japan, Northern Europe), most corporate systems have traditionally favored stakeholders, but the movement has been clearly in the shareholder direction in the past couple of decades (but not without their attendant conflicts).

    I am skeptical that this will amount to much, but my guess is as good as yours.
  • Reply 42 of 67

    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.
    The trouble with "cultural values" is that it's not the same for you and me. Or a black person v. a white person, or a Muslim v. a Hindu v. a Christian v. Jew. Or a younger v. an oder person. Or a Republican v. a Democrat. Or people of different genders. And so on. When you run a firm with diverse employees and across multiple nationalities, there is no one one yardstick of "cultural values" to manage by. IMHO, it's recipe for disaster.

    The notion of of managing for "more money" -- crass as it is -- is using a yardstick that everyone understands. And it's transparent.
    muthuk_vanalingam
  • Reply 43 of 67
    JWSC said:
    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.
    Talking to your Congress-person will do no good: all corporate law in the US is at the state level. The Federal government only has some limited control over it, e.g., in the areas of disclosure, antitrust, bankruptcy. Laws governing the day-to-day running of businesses, and issues of corporate purpose/accountability are managed by states.
    edited August 2019 knowitalllostkiwi
  • Reply 44 of 67
    JWSCJWSC Posts: 1,203member

    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.
    The trouble with "cultural values" is that it's not the same for you and me. Or a black person v. a white person, or a Muslim v. a Hindu v. a Christian v. Jew. Or a younger v. an oder person. Or a Republican v. a Democrat. Or people of different genders. And so on. When you run a firm with diverse employees and across multiple nationalities, there is no one one yardstick of "cultural values" to manage by. IMHO, it's recipe for disaster.

    The notion of of managing for "more money" -- crass as it is -- is using a yardstick that everyone understands. And it's transparent.

    While it may be a yardstick that, generally speaking, has been agreed to, it’s not a very good one.

  • Reply 45 of 67

    AppleZulu said:
    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.
    It seems to me that managing for "stakeholders" and "sustainability" was not at the top of Steve Jobs's agenda when he came back to fix a near-bankrupt company in 1998. In fact, didn't he have to aggressively prune products, people and suppliers? I don't recall Apple having an environmental report in 1998.
  • Reply 46 of 67
    AppleExposedAppleExposed Posts: 1,805unconfirmed, member
    avon b7 said:
    tmay said:
    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.


    Gee, if only you were as cynical of Huawei/China, we would be the bestest mates!
    My cynicism isn't selective. It's generalised.

    This can be looked at with cynicism:



    And in part I do look at it that way but the difference is that what is explained in the video is actually real. It is marketing and I can see that for what it is. But it is also real and the possibilities are awe inspiring. That's why I am hopeful in spite of everything. My cynicism included.

    I live in a area plagued by forest fires and invasive species. There is a huge amount of good that technology and communications can do. From locating Asian Hornet nests (protecting autoctonous bees) to using autonomous drones to monitor overhead high energy power cables (a common cause of fires).

    Goodness they're trying to be Apple so bad with their stolen technology.
    StrangeDayslostkiwi
  • Reply 47 of 67
    JWSC said:

    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.
    The trouble with "cultural values" is that it's not the same for you and me. Or a black person v. a white person, or a Muslim v. a Hindu v. a Christian v. Jew. Or a younger v. an oder person. Or a Republican v. a Democrat. Or people of different genders. And so on. When you run a firm with diverse employees and across multiple nationalities, there is no one one yardstick of "cultural values" to manage by. IMHO, it's recipe for disaster.

    The notion of of managing for "more money" -- crass as it is -- is using a yardstick that everyone understands. And it's transparent.

    While it may be a yardstick that, generally speaking, has been agreed to, it’s not a very good one.

    Perhaps not to you, but it is quite the dominant yardstick worldwide. Why is that? Could it be because it has created a lot of wealth for a lot of people? Produced innovation and R&D that made people's lives easier/better? Employed hundreds of millions of people? Funded an inordinate amount of charities and foundations (e.g., Gates, Ford, Mellon, Rockefeller, Buffett.... the list is in the hundreds -- for example, look at this list, how many are non-corporate)? Generated taxes (not just corporate taxes, but taxes on sales, taxes on the incomes of employees, taxes on dividends, taxes on equity sales)? Enabled the creation of millions of small businesses (as suppliers, retailers/wholesalers, developers, collateral businesses such as coffee shops and restaurants that depend on the employees of these companies)?
    muthuk_vanalingam
  • Reply 48 of 67
    JWSCJWSC Posts: 1,203member
    JWSC said:

    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.
    The trouble with "cultural values" is that it's not the same for you and me. Or a black person v. a white person, or a Muslim v. a Hindu v. a Christian v. Jew. Or a younger v. an oder person. Or a Republican v. a Democrat. Or people of different genders. And so on. When you run a firm with diverse employees and across multiple nationalities, there is no one one yardstick of "cultural values" to manage by. IMHO, it's recipe for disaster.

    The notion of of managing for "more money" -- crass as it is -- is using a yardstick that everyone understands. And it's transparent.

    While it may be a yardstick that, generally speaking, has been agreed to, it’s not a very good one.

    Perhaps not to you, but it is quite the dominant yardstick worldwide. Why is that? Could it be because it has created a lot of wealth for a lot of people? Produced innovation and R&D that made people's lives easier/better? Employed hundreds of millions of people? Funded an inordinate amount of charities and foundations (e.g., Gates, Ford, Mellon, Rockefeller, Buffett.... the list is in the hundreds -- for example, look at this list, how many are non-corporate)? Generated taxes (not just corporate taxes, but taxes on sales, taxes on the incomes of employees, taxes on dividends, taxes on equity sales)? Enabled the creation of millions of small businesses (as suppliers, retailers/wholesalers, developers, collateral businesses such as coffee shops and restaurants that depend on the employees of these companies)?
    Obtuse.  I’m not dissing the stock market in any way.  It is the perverse incentives that have been put in place in recent years that I take issue with.
  • Reply 49 of 67
    hexclockhexclock Posts: 1,287member

    wallym said:
    Meh.  A lot of this stuff is awesome once you have cash coming on a continual basis.  the problem is when you don't have cash coming in regularly, or enough of it.  I work in the startup area as well as consulting.  Life has taught me one thing in this area, take care of the customer.  If you take care and focus on the customer, then you create value for all.  If you focus on just the shareholder, you don't create value for anyone long term.  Sears, IBM, and GE are current examples of companies that have focused too much on the shareholder, and all of their businesses have seen a significant downturn.  
    What you're referring to is the "delight the customer" management style, and it is exactly what is advocated by the anti-maximize-shareholder-value camp. They agree with you. Delighting the customer should be tantamount, do that first. Profits come from happy customers. Shareholders are made whole when the company becomes successful by delighting its customers and the resulting profit. Other stakeholders are the workers, and the community. We recognize this and respect everyone, not just the shareholders.

    This is approach to running a company is not limited to mega-corps. In many ways it's even easier for the smaller business. 
    Well it seems to have worked for Apple. I have been both delighted as a consumer and rewarded as a share holder. 
    StrangeDays
  • Reply 50 of 67
    AppleZuluAppleZulu Posts: 2,091member

    AppleZulu said:
    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.
    It seems to me that managing for "stakeholders" and "sustainability" was not at the top of Steve Jobs's agenda when he came back to fix a near-bankrupt company in 1998. In fact, didn't he have to aggressively prune products, people and suppliers? I don't recall Apple having an environmental report in 1998.
    Jobs came back to a company that was reverting to making widgets, specifically in pursuit of your singular yardstick. They had even abandoned a central, core value to what Apple is and how it operates, and were licensing their OS to clone PC makers just to be able to claim extra market share. They were becoming precisely the thing Apple wasn't: another generic computer company trying desperately to compete in the widget selling game, just trying to manage for "more money," instead of creating high-quality tech that people actually want.

    Jobs came in and scuttled the OS licensing deals, crashing Apple's already small market share. (What? that's not in the shareholder's interest!) For long-term success, Apple has to make its hardware and software together. If there is one thing that sets Apple apart, that is it. Jobs could have just tweaked those OS licensing deals, temporarily boosted market share and advanced quarterly earnings in the short term. That's "managing for more money." Apple could have become another (much smaller) Microsoft, writing and selling a middling bloatware OS product, capable of more or less running whatever garbage other hardware manufacturers want to turn out in pursuit of shrinking margins. That's "managing for more money." Of course, if he'd done that, there'd be no conversations about Apple today, because the company would never have gone on to make iMacs, iPods, and iPhones. It would've either muddled along as another meaningless nameplate on indistinguishable widgets, or it would've been bought out by a competitor (payoff for shareholders, ammiright!?) or just simply closed up shop. 

    Saying that there are no shared cultural values and that the lowest common denominator of pursuing a "more money" yardstick is the only way to run a business is to be incredibly shortsighted. Apple is an imperfect but good case in point that shareholder interests are often best subverted in the short term in order for the company to first serve its other stakeholders well. That, in turn, can profitably serve shareholders who are likewise willing to play the long game.
    StrangeDaysFileMakerFellerlostkiwi
  • Reply 51 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.
    I don't think there is much serious or systematic pushback (but I'd love to be proven wrong on that -- do tell me more).

    This conversation is not new. In the US, over the past century, the pendulum has swung in the stakeholder direction at least a couple of times, the most famous being in the 1930s, as enshrined in the famous "Berle-Dodd debate". Outside the US, especially in non-Anglo American systems of corporate governance (e.g., Germany, France, Japan, Northern Europe), most corporate systems have traditionally favored stakeholders, but the movement has been clearly in the shareholder direction in the past couple of decades (but not without their attendant conflicts).

    I am skeptical that this will amount to much, but my guess is as good as yours.
    It’s been part of some recent political discussion. Warren has suggested requiring worker representation on corporate boards similar to some other countries, rather than just stuffing them full of millionaire buddies giving each other obscene salary packages that reward even outright failure. 
    edited August 2019 JWSClostkiwi
  • Reply 52 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.
    The trouble with "cultural values" is that it's not the same for you and me. Or a black person v. a white person, or a Muslim v. a Hindu v. a Christian v. Jew. Or a younger v. an oder person. Or a Republican v. a Democrat. Or people of different genders. And so on. When you run a firm with diverse employees and across multiple nationalities, there is no one one yardstick of "cultural values" to manage by. IMHO, it's recipe for disaster.

    The notion of of managing for "more money" -- crass as it is -- is using a yardstick that everyone understands. And it's transparent.
    Disagree. Any human entity defines its culture. Apple has a corporate culture, as does Uber. They are different. The culture is not limited by the religion or other stats of its employees. 

    Managing for something other than as much money as possible is not new or controversial. 
  • Reply 53 of 67
    StrangeDaysStrangeDays Posts: 12,957member

    avon b7 said:
    tmay said:
    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.


    Gee, if only you were as cynical of Huawei/China, we would be the bestest mates!
    My cynicism isn't selective. It's generalised.

    This can be looked at with cynicism:



    And in part I do look at it that way but the difference is that what is explained in the video is actually real. It is marketing and I can see that for what it is. But it is also real and the possibilities are awe inspiring. That's why I am hopeful in spite of everything. My cynicism included.

    I live in a area plagued by forest fires and invasive species. There is a huge amount of good that technology and communications can do. From locating Asian Hornet nests (protecting autoctonous bees) to using autonomous drones to monitor overhead high energy power cables (a common cause of fires).

    Goodness they're trying to be Apple so bad with their stolen technology.
    Agreed, even their PR videos are ripoffs of Apple’s. “We are more than an oppressive Communist regime-owned entity...we also help disabled people. Like Apple. So please, let us manage your national telecommunications.”
    edited August 2019 tmaylostkiwi
  • Reply 54 of 67
    StrangeDaysStrangeDays Posts: 12,957member

    hexclock said:

    wallym said:
    Meh.  A lot of this stuff is awesome once you have cash coming on a continual basis.  the problem is when you don't have cash coming in regularly, or enough of it.  I work in the startup area as well as consulting.  Life has taught me one thing in this area, take care of the customer.  If you take care and focus on the customer, then you create value for all.  If you focus on just the shareholder, you don't create value for anyone long term.  Sears, IBM, and GE are current examples of companies that have focused too much on the shareholder, and all of their businesses have seen a significant downturn.  
    What you're referring to is the "delight the customer" management style, and it is exactly what is advocated by the anti-maximize-shareholder-value camp. They agree with you. Delighting the customer should be tantamount, do that first. Profits come from happy customers. Shareholders are made whole when the company becomes successful by delighting its customers and the resulting profit. Other stakeholders are the workers, and the community. We recognize this and respect everyone, not just the shareholders.

    This is approach to running a company is not limited to mega-corps. In many ways it's even easier for the smaller business. 
    Well it seems to have worked for Apple. I have been both delighted as a consumer and rewarded as a share holder. 
    Indeed it has. Apple is the poster-boy for Delight The Customer, and anti managing to the stock price. And they are the most successful public corp in human history. I don’t believe it’s coincidence. 
    lostkiwi
  • Reply 55 of 67
    MplsPMplsP Posts: 3,966member
    And in unrelated news, CEO pay is up 940% over the last 40 years...

    http://www.startribune.com/ceo-pay-up-940-3-over-last-four-decades/547872572/?refresh=true

    They should also end the practice of stock options, and stock as pay. These create a natural incentive to make decisions based on short term stock price more than anything else. It's never been clear to me that the stock price for most companies has a clear relation to anything of substance, anyways.
    edited August 2019
  • Reply 56 of 67
    irelandireland Posts: 17,798member
    Good guy Apple saves the world by selling people expensive computers and phones. Apple ain’t going to be rooting for the consumer anytime soon. Apple cares about Apple first, profit second and the user maybe third. If Apple cared about the user’s experience first they do many things a whole lot differently.
    edited August 2019
  • Reply 57 of 67
    mac_dogmac_dog Posts: 1,075member
    This is going to chap some hides. 
  • Reply 58 of 67
    monstrositymonstrosity Posts: 2,234member
    This won't end well. Without being accountable to shareholders they can now pursue things like increased censorship, de-platforming and election meddling. Fascism dressed as morals. 
    anantksundaram
  • Reply 60 of 67
    JWSCJWSC Posts: 1,203member
    This won't end well. Without being accountable to shareholders they can now pursue things like increased censorship, de-platforming and election meddling. Fascism dressed as morals. 

    Congratulations on being the first to post something so out of left field that it must have originated from the stadium across the river.  De-platforming??!   Well, at least I learned a new term (I think) today.  I can’t imagine the contortions of the mind you must have gone through to connect all that with a CEO taking a more balanced and rational approach to management.

    BTW, no one said that CEOs would no longer be accountable to shareholders.  They should be, just not to the exclusion of everything and everyone else.

    lostkiwi
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