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Corporate Ethics

The Don said:
They do for all privately owned companies.

Utter rubbish, as the existence of various publicly-traded companies with "ethical" policies shows.

Public or private, they still have shareholders and the process is the same. Heck with a small number of private shareholders, convincing them to focus on anything other than the bottom line can be more difficult because there's less risk of public scrutiny.

The Koch and Trump families are hardly poster boys for ethical business practices.
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I'll wait for you to catch up.
 
The Don said:
Only if the shareholders allow it. Paying low-level staff members more than necessary doesn't seem to sit well with shareholders.
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The phrase "low-level" being critical here. Apparently, grossly over-paying high level personnel is ok. The situation is almost designed for corruption: The CEO selects the people on the Compensation Committee of the Board and they in turn "compensate" him. Do those same people allow the low-level people decide *their* own compensation level? Ha-ha.

The Don said:
For the shareholders of most businesses, if you fail to maximise shareholder return, you'll be out on your ear.
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This is manifestly untrue.
 
Hmm, now that this is its own thread... I'll poke at a couple things that I wasn't going to poke at in the Trump Presidency thread.

Opinion | Finland Is a Capitalist Paradise - The New York Times

It's an interesting piece about a strongly capitalist system that's kept healthy and in check with a strong social democracy. Business is left to focus on actually doing business, rather than getting bogged down with all that freedom to get screwed over ever more bs that current Republican politicians push for.

On the other hand -

The Economy of Evil is a piece about the relation between capitalism and fascism. When the government is effectively being run by private interests that are focused on making profit, atrocities happen and escalate fast. To take that a bit further, unfortunately, we're seeing that right now in the US, thanks to Trump and the Republicans - even using some arguments and tactics that are pretty much the same as those used by the fascists as they took power.
 
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Minoosh said:
And now I'll address things that aren't strictly his fault.

I compare his actions to Wal-Mart. Many people thought it was just great being able to buy lots of cheap Chinese manufactured goods. (Though Wal-mart tried to brag about "Made in the USA," they got in trouble for this. ) Then some time later noticing that American manufacturing was hurting, and that big-box stores were crowding out local businesses. I felt that some of their practices were anti-competitive and socially irresponsible. Now, not everyone agrees that businesses have any duty to communities; that their highest moral calling to maximize value for shareholders. The Walton family holds the majority of Wal-Mart stock, Bezos does not command that share of Amazon, so my criticism for him is more muted.

But: it's going to function like a monopoly as much as it possibly can. It is going to integrate vertically. It will operate at a loss to consolidate market share. I'm typing this on an Amazon tablet: I buy a fair number of ebooks from them and pay no separate sales tax. So, I'm hurting locally owned bricks and mortar bookstores solely for convenience. My fault, not Amazon's. Maybe Amazon has some kind of deal with states to reimburse for some taxes; I'm not up for researching that right now. But if not, I'm hurting local people. Schools. Retail staffers. Road repairs. Etc.

And finally, I have some distaste for the trend of having everything delivered to your home. I'd be curious if that affects our carbon footprint.

And a thing I just remembered: The promise of immediate delivery was creating possible safety problems in the fullfilment/delivery chain. And a lot of stress.

This is kind of off off-topic in this thread and I'll admit, not rigorously researched. So I'm sure I've left myself open to justifiable criticism. This could be its own thread.
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I agree with you.

It's unfair to pick on him maybe - my own boss could pay people better and he does not.

With a guy as wealthy as Bezos though, maybe he could be the guy to show the rest how it's done and pay people a fair wage, etc. Of course he won't, in fact I've read some articles about the conditions the warehouse people have to work under and it sounds very bad.

I remember the big deal when Amazon said they would pay $15 an hour. That's practically slave wages in Silicon Valley. Great guy!

I also think that business model is having a negative impact in more ways than I can count. You touched on a few.
 
JoeMorgue said:
The idea that "I have a certain duty to maximize profits to my shareholders" (which is true more or less) equates to "Therefore I have no moral responsibility to do anything else up to and including basic human rights, the environment, or anything else" is insane.

Here's a question for Don. I'm a CEO of a large business. Do I have a moral obligation to break the law if it makes money for shareholders?

If not, why is that different?
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Honestly? It depends on the arrangement you have with the shareholders.

Most schemes, the profit depends on following the law.
 
The Don said:
Companies are not run for the benefit of their customers or their employees, they are run solely for the benefit of their shareholders.
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The Don said:
When I became a director of a publicly quoted company (at the time it was AIM, now it's on the main market), my responsibilities to the shareholders and (possible maximum) penalties for failing to deliver were made very clear to me.
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In Australia, the highest duty is not to the shareholders, it is to the corporation itself:
Good faith--directors and other officers
(1) A director or other officer of a corporation must exercise their powers and discharge their duties:
(a) in good faith in the best interests of the corporation; and
(b) for a proper purpose.
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http://www5.austlii.edu.au/au/legis/cth/consol_act/ca2001172/s181.html
 
Fast Eddie B said:
Well, since the shareholders are, in fact, the owners of the corporation, that seems like a distinction without a difference.
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It isn't actually. A corporation is a legal entity - an artificial person. It exists separately from the employees, customers and shareholders.

More often than not, the interests of the shareholders coincide with the interests of the corporation (a healthy corporation is good for the shareholders) but where they don't, the corporation wins.
 
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acbytesla said:
There are things I like about Bezos and things I hate. He's a mega-billionaire with an ego to match. He's a very shrewd businessman and takes no prisoners. But unlike Trump Bezos does have principles.
Everyone assumed Amazon was going to win the cloud contract. Their product is better than Microsoft's. Bezos is probably right that the reason Amazon lost this contract was because Trump put his thumb on the scale. But proving it is probably difficult. I expected Amazon to challenge this.
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Taking Trump out of the comparison

This is arguable.

Dude is a nasty piece of work, from what I have read in the past.
 
Minoosh said:
- IMO, he treats his warehouse staff poorly.
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I never understood this notion. Those warehouse workers were offered a deal they can leave at any time and continue to accept. Not only that, it was the best offer they had. Meanwhile, most of us humans have offered that worker jack. If Bezos is treating that person poorly then how are we treating them?
 
Darat said:
For the UK this is a good starting point, it cites some examples from actual case law:

https://diligent.com/en-gb/blog/main-fiduciary-duties-uk-company-directors/
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Interesting:
In the case of corporate law, the ‘someone else’ whose interests the director must promote is the corporation itself. In other words, your loyalty as a corporate director should be directed to the corporation as such, rather than to the shareholders, creditors, employees or any other specific stakeholder group.
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psionl0 said:
It isn't actually. A corporation is a legal entity - an artificial person. It exists separately from the employees, customers and shareholders.

More often than not, the interests of the shareholders coincide with the interests of the corporation (a healthy corporation is good for the shareholders) but where they don't, the corporation wins.
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Good points all.

But it’s hard for me to think of a case where long term success for the corporation does not also benefit the shareholders. And, conversely, where actions leading to failure or ongoing losses would not also harm the shareholders.

I imagined an edge case* where a director authorized massive shareholder distributions to the harm of research and development, or marketing, or whatever, needed to keep the company competitive. But even here, I’d say that in spite of the short term benefit of said distributions to shareholders, such distributions would still harm them in the long run as it takes the company down or hurts the value of their shares once the selling off of assets is complete.

But your point is well taken.


*I think an example of such a case was brought up on the Opening Arguments podcast. I forget the details but the new board at Sears sold off its most valuable assets - including the Craftsman brand - and used that money for huge distributions to shareholders, which included the board members as major shareholders. I guess this is an example of actions detrimental to the company in fact benefited shareholders. And I have a vague recollection the host suggested such a raid might have legal consequences.
 
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Fast Eddie B said:
Good points all.

But it’s hard for me to think of a case where long term success for the corporation does not also benefit the shareholders. And, conversely, where actions leading to failure or ongoing losses would not also harm the shareholders.

I imagined an edge case* where a director authorized massive shareholder distributions to the harm of research and development, or marketing, or whatever, needed to keep the company competitive. But even here, I’d say that in spite of the short term benefit of said distributions to shareholders, such distributions would still harm them in the long run as it takes the company down or hurts the value of their shares once the selling off of assets is complete.

But your point is well taken.


*I think an example of such a case was brought up on the Opening Arguments podcast. I forget the details but the new board at Sears sold off its most valuable assets - including the Craftsman brand - and used that money for huge disbursements to shareholders, which included the board as major shareholders. I guess this is an example of actions detrimental to the company in fact benefited shareholders. And I have a vague recollection the host suggested such a raid might have legal consequences.
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I think even those are just variations that an executive can't hide behind "but I gave them money!" If destroying a company truly benefits the shareholders, I don't understand an argument against
 
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