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Comment by hinkley | Hacker News Reader

If I own shares in a retailer and I decide that, say, soda is bad, I can try to use my shareholder rights to talk to them about how prominently they display soda and possibly reducing their shelf real estate for soda.

But what if I own shares of a soda company? What exactly should I do in that case? Try to convince them to exit their primary market and become an entirely different company? Why would I waste my time and energy that way?

It makes absolutely no sense to invest in one kind of company and then insist they become something else. Find another company that is conceptually similar to what you had in mind and invest your time and money in them instead.

Get energy companies to invest in not-coal and not-natural gas, sure, but investing in a petroleum or coal company so you can vote? What exactly do you think you are going to vote for? Suicide?

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> Get energy companies to invest in not-coal and not-natural gas, sure

You mean like Exxon Mobil is doing (see https://seekingalpha.com/article/4126346-exxon-mobils-renewa... )?

Or like Chevron is doing? Or BP? All of these companies are in fact investing in not-oil and not-coal and not-natural gas.

Yes, this -

Also, lobbying for change with a direct financial stake in the outcome is inevitably going to be less effective.

Is your organisation really going to argue that it deserves to lose money for holding a bad investment?

Theoretically if 51% of ownership of an oil company wants to seal all oil wells isn't that what the company should do?

certainly they could elect board members who'll hire CEOs to execute that plan.

Then minority’s shareholders will sue because their share value declined and the board’s legal obligation is to pursue shareholder value, not do what the majority owners of company want them to do.

I’m torn on that, but minority’s shareholders have a legitimate expectation their rights should be protected.

> the board’s legal obligation is to pursue shareholder value

No, its not.

> not do what the majority owners of company want them to do.

Actually, the purpose laid out in most corporate charters is, within the law, to do exactly that.

> I’m torn on that, but minority’s shareholders have a legitimate expectation their rights should be protected.

They have a legitimate expectation that their rights should be protected, but the right you are basing this argument on does not exist.

I agree that it's not quite as simple as what he was suggesting but it's also not just majority rule, even if the majority want to screw over the rest of the shareholders. That's old established case law, at least in the US. See Dodge v. Ford Motor Co.

https://en.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

They can largely do whatever they want, so long as there is some rational argument that it's for the benefit of the company. If 51% of shareholders in some fossil fuel giant publicly stated that their only goals were to drive the company out of business and screw over the other 49% of shareholders, that wouldn't fly. However it's totally fine for them to push a radical new investment strategy of "buy high, sell low" and drive the business into the ground that way.

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