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Comment by mikestew | Hacker News Reader

"<Tim Cook> said that there are many things Apple does because they are right and just, and that a return on investment (ROI) was not the primary consideration on such issues"

The next time someone trots out the tired old "companies are legally obligated to maximize profits/shareholder value" to explain away crappy corporate behavior, I'm linking to this.

And kudos to Cook for telling NCPPR to take a figurative hike.

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That line about legal obligation doesn't even pass basic analysis. Who is to say what maximizes value? Contributing to open source creates a good name, but does it harm the company by helping competitors?

It's such an idiotic line and is usually given as a poor substitute for reasoning about a company's actions.

It's not an idiotic line, it's just incomplete. They have a legal obligation to their shareholders demands, whether that be profits or otherwise. That is a simple fact that can't be disputed. It just happens that for most public companies, shareholders wan't short term profits.

This is worth parsing through slightly. CEO's have a fiduciary responsibility (not to act with malfeasance); and the shareholders have the right to replace the CEO. That's about it. The CEO is not under any obligation other than self-interest when it comes to what happens in between.

The meme about "profit maximization" is one of those Keynesian sayings "of a defunct economist" that seems to rule people's imaginations.

>> The next time someone trots out the tired old "companies are legally obligated to maximize profits/shareholder value" to explain away crappy corporate behavior, I'm linking to this.

What he's doing IS MAXIMISING SHAREHOLDER VALUE! In the long term the sustainability projects will be important. Over 97% of shareholders rejected the proposal put forward so technically he was doing what the majority of the shareholders agreed with.

> IS MAXIMISING SHAREHOLDER VALUE

Did the stock go up after the event? http://finance.yahoo.com/q/bc?s=AAPL&t=5d&l=on&z=l&q=l&c=

Stock going up just after an event doesn't mean that event was good for the company. A dead cat bounce is stock going up.

This took place at the annual general shareholders meeting - this was obviously not the only thing discussed. For all you know his remarks on this subject prevented a larger drop in price.

For some people, value != price

>companies are legally obligated to maximize profits/shareholder value

What this should really say is "obligated to maximize shareholder demands". It has nothing to do with ROI per se, just that the CEO is legally obligated to perform the demands of the shareholders. For public companies, 99% of the time that means maximizing short term profits to make institutional investors happy.

Like it or not, that's the way it is and not every CEO gets to be Tim Cook who has A LOT more leeway with investors than the CEO of "random fortune 500 company".

And do note that in this particular case, when the shareholders voted on their demands, the NCPPR position got less than 3% of the votes - so in reality it's not like the majority wants short-term profits above everything else.

Apple's sustainability efforts (and other things like support for blind users) can be seen as being in the interest of profits.

The NCPPR's view that Apple should do the minimum necessary to meet government environmental rules in order to maximise profits is short-sighted. A lot of people care about environmental issues - as well as things like labour concerns with the factories in China. By doing the right thing and addressing public concerns on these issues, Apple enhances its reputation, which can in turn lead to greater profits.

If only Tim Cook said that instead of saying "I don't consider the bloody ROI, and if you don't like that, divest". There's a legit approach of going short term, and it may be wrong, and if it is wrong, it can be explained why it is wrong - just as you did. Or it can be shouted down - because how dare those neanderthals ask us questions? I'd rather like to live in a climate where questions get answered, not shouted down.

There comes a point where questions themselves are being used as an abusive form of politics. At that point, a display of anger is totally appropriate.

Tim Cook has a responsibility to protect himself as CEO, the company itself, and the other shareholders, from manipulative questioning by a fringe group. He also has a responsibility to stand for the company's values.

This is often discussed in the UK, here's one such article: http://www.telegraph.co.uk/finance/financetopics/10183004/Pr... but the conclusion is that a UK company at least should promote the success of the company, and that isn't all about pure profit.

Yeah, that will show them.

Yeah because that's just what we need, another asinine interpretation of an event in which the CEO was basically hand-tied to do one thing: not fuck up PR. And let's just ignore the legal precedents where companies were sued for their philanthropic work, and indeed lost. (see the many court cases in which courts end up ruling that companies are not allowed to engage in purely philanthropic duties when there is a rigid fiduciary responsibility to maximize profits; see eBay vs. Craigslist).

And anyway, actions speak louder than words. What I know of Apple is that it had a CEO who orchestrated keeping wages down for engineers, orchestrated price fixing of ebooks, kept taking credit for other people's work, frequently partook in borderline psychopathic behavior (woz: "I begged Steve that we donate the first Apple I to a woman who took computers into elementary schools but he made my buy it and donate it myself."), etc. etc. If Tim Cook actually goes on to commit some serious dollar on philanthropic activities, I would change my mind about Apple, until then, it's clear that it's all a bullshit PR dance.

Good news, he has!

http://arstechnica.com/apple/2011/09/the-post-jobs-era-tim-c...

http://news.cnet.com/8301-13579_3-57370922-37/apple-ceo-tim-...

Cool, good to hear, I didn't know about this. It seems to be a small step, but at least it's a step in the right direction. I hope Apple makes it a point to advertise everywhere that they're doing this (so that other companies can follow). I think America would do well to have a policy compelling publicly owned companies to have social goals (apart from the profit-maximizing ones).

I hope Apple makes it a point to advertise everywhere that they're doing this

In which case they are going to be accused of doing a "bullshit PR dance." Damned if you do...

If they are actually doing the advertised good deeds, it will just be a PR dance, minus the bullshit. One smells a whole lot better.

Why not just admit that you wrongly impugned them?

>(see the many court cases in which courts end up ruling that companies are not allowed to engage in purely philanthropic duties when there is a rigid fiduciary responsibility to maximize profits; see eBay vs. Craigslist).

I saw both the Delaware version and the California version of eBay vs. Craigslist. Neither had anything to do with philanthropy. They involved a poison pill strategy. At the risk of standing in the way of a good rant, I think you'll need a better example.

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