max profit dodge v ford

see systems: to max any one thing will throw out of balance; cf extraction eg Donald Worster maxims, duty to extract for personal advancement

used AI to deny claims, highest rate

max profit = extraction sys out of balance

aha huge pay rationalized by capitalism gets biggest brain who will create effic that will benefit us all but actually gives motivation for crime, corruption inefficiency wealth redistrib up --> inequality --> chaos

12 24

no lnx

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When profits kill: The deadly cost of treating healthcare as a business

Thom Hartmann December 10, 2024

The recent assassination of the CEO of UnitedHealthcare — the health insurance company with, reportedly, the highest rate of claims rejections (and thus dead, wounded, and furious customers and their relations) — gives us a perfect window to understand the stupidity and danger of the Musk/Trump/Ramaswamy strategy of “cutting government” to “make it more efficient, run it like a corporation.”

Consider health care, which in almost every other developed country in the world is legally part of the commons — the infrastructure of the nation, like our roads, public schools, parks, police, military, libraries, and fire departments — owned by the people collectively and run for the sole purpose of meeting a basic human need.

The entire idea of government — dating all the way back to Gilgamesh and before — is to fulfill that singular purpose of meeting citizens’ needs and keeping the nation strong and healthy. That’s a very different mandate from that of a corporation, which is solely directed (some argue by law) to generate profits.

The Veterans’ Administration healthcare system, for example, is essentially socialist rather than capitalist. The VA owns the land and buildings, pays the salaries of everybody from the surgeons to the janitors, and makes most all decisions about care. Its primary purpose — just like that of the healthcare systems of every other democracy in the world — is to keep and make veterans healthy. Its operation is nearly identical to that of Britain’s beloved socialist National Health Service.

UnitedHealthcare similarly owns its own land and buildings, and its officers and employees behave in a way that’s aligned with the company’s primary purpose, but that purpose is to make a profit. Sure, it writes checks for healthcare that’s then delivered to people, but that’s just the way UnitedHealthcare makes money; writing checks and, most importantly, refusing to write checks.

Think about it. If UnitedHealthcare’s main goal was to keep people healthy, they wouldn’t be rejecting 32 percent of claims presented to them. Like the VA, when people needed help they’d make sure they got it.

Instead, they make damn sure their executives get millions of dollars every year (and investors get billions) because making a massive profit ($23 billion last year, and nearly every penny arguably came from saying “no” to somebody’s healthcare needs) is their real business.

On the other hand, if the VA’s goal was to make or save money by “being run efficiently like a company,” they’d be refusing service to a lot more veterans (which it appears is on the horizon).

This is the essential difference between government and business, between meeting human needs (social) and reaching capitalism’s goal (profit).

It’s why its deeply idiotic to say, as Republicans have been doing since the Reagan Revolution, that “government should be run like a business.” That’s nearly as crackbrained a suggestion as saying that fire departments should make a profit (a doltish notion promoted by some Libertarians). Government should be run like a government, and companies should be run like companies.

Given how obvious this is with even a little bit of thought, where did this imbecilic idea that government should run like a business come from?

Turns out, it’s been driven for most of the past century by morbidly rich businessmen (almost entirely men) who don’t want to pay their taxes. As Jeff Tiedrich notes:

“The scariest sentence in the English language is: ‘I’m a billionaire, and I’m here to help.’”

Rightwing billionaires who don’t want to pay their fair share of the costs of society set up think tanks, policy centers, and built media operations to promote their idea that the commons are really there for them to plunder under the rubric of privatization and efficiency.

They’ve had considerable success. Slightly more than half of Medicare is now privatized, multiple Republican-controlled states are in the process of privatizing their public school systems, and the billionaire-funded Project 2025 and the incoming Trump administration have big plans for privatizing other essential government services.

The area where their success is most visible, though, is the American healthcare system. Because the desire of rightwing billionaires not to pay taxes have prevailed ever since Harry Truman first proposed single-payer healthcare like most of the rest of the world has, Americans spend significantly more on healthcare than other developed countries.

In 2022, citizens of the United States spent an estimated $12,742 per person on healthcare, the highest among wealthy nations. This is nearly twice the average of $6,850 per person for other wealthy OECD countries.

Over the next decade, it is estimated that America will spend between $55 and $60 trillion on healthcare if nothing changes and we continue to cut giant corporations in for a large slice of our healthcare money.

On the other hand, Senator Bernie Sanders’ single-payer Medicare For All plan would only cost $32 trillion over the next 10 years. And it would cover everybody in America, every man woman and child, in every medical aspect including vision, dental, psychological, and hearing.

Currently 25 million Americans have no health insurance whatsoever.

If we keep our current system, the difference between it and the savings from a single-payer system will end up in the pockets, in large part, of massive insurance giants and their executives and investors. And as campaign contributions for bought off Republicans. This isn’t rocket science.

And you’d think that giving all those extra billions to companies like UnitedHealthcare would result in America having great health outcomes. But, no.

Despite insanely higher spending, the U.S. has a lower life expectancy at birth, higher rates of chronic diseases, higher rates of avoidable or treatable deaths, and higher maternal and infant mortality rates than any of our peer nations.

Compared to single-payer nations like Canada, the U.S. also has a higher incidence of chronic health conditions, Americans see doctors less often and have fewer hospital stays, and the U.S. has fewer hospital beds and physicians per person.

No other country in the world allows a predatory for-profit industry like this to exist as a primary way of providing healthcare. Every other advanced democracy considers healthcare a right of citizenship, rather than an opportunity for a handful of industry executives to hoard a fortune, buy Swiss chalets, and fly around on private jets.

This is one of the most widely shared graphics on social media over the past few days in posts having to do with Thompson’s murder…

Sure, there are lots of health insurance companies in other developed countries, but instead of offering basic healthcare (which is provided by the government) mostly wealthy people subscribe to them to pay for premium services like private hospital rooms, international air ambulance services, and cosmetic surgery.

Essentially, UnitedHealthcare’s CEO Brian Thompson made decisions that killed Americans for a living, in exchange for $10 million a year. He and his peers in the industry are probably paid as much as they are because there is an actual shortage of people with business training who are willing to oversee decisions that cause or allow others to die in exchange for millions in annual compensation.

That Americans are well aware of this obscenity explains the gleeful response to his murder that’s spread across social media, including the refusal of online sleuths to participate in finding his killer.

It shouldn’t need be said that vigilantism is no way to respond to toxic individuals and companies that cause Americans to die unnecessarily. Hopefully, Thompson’s murder will spark a conversation about the role of government and the commons — and the very real need to end the corrupt privatization of our healthcare system (including the Medicare Advantage scam) that has harmed so many of us and killed or injured so many of the people we love.

ALSO READ: CEO shooting suspect’s manifesto claims violence is answer to health care industry: report

===

divest ESG turncoat or realist?

https://corpgov.law.harvard.edu/2022/09/18/esg-stakeholder-governance-and-the-duty-of-the-corporation

tags

Corporate purpose, ESG, Shareholder value, Stakeholders, Stewardship, Sustainability

Martin Lipton is a founding partner of Wachtell, Lipton, Rosen & Katz,specializing in mergers and acquisitions and matters affecting corporate policy and strategy. This post is based on a Wachtell Lipton memorandum by Mr. Lipton, Adam O. Emmerich, Kevin S. Schwartz, Sabastian V. Niles and Anna M. D’Ginto.

Related research from the Program on Corporate Governance includes The Illusory Promise of Stakeholder Governance (discussed on the Forum here) and Will Corporations Deliver Value to All Stakeholders? (discussed on the Forum here), both by Lucian A. Bebchuk and Roberto Tallarita; Restoration: The Role Stakeholder Governance Must Play in Recreating a Fair and Sustainable American Economy—A Reply to Professor Rock by Leo E. Strine, Jr. (discussed on the Forum here); and Stakeholder Capitalism in the Time of COVID, by Lucian A. Bebchuk, Kobi Kastiel, and Roberto Tallarita (discussed on the Forum here).

Recently, there has been much confusion and misinformation about (1) environmental, social, and governance (ESG) considerations, (2) the ways in which companies, boards, asset managers, investment funds, and other market participants can, do, and should factor such considerations into their decision-making processes, and (3) the need for companies to consider, balance, advance, and appropriately protect stakeholder interests in order to create value, generate sustainable returns, and guard against downside risks to value and corporate health. This cloud of confusion stems, in part, from nascent efforts to politicize ESG.

Consider the Trump administration’s proposed rulemaking in the Department of Labor that would have required fiduciaries of retirement plans making investment decisions to focus solely on “pecuniary” factors (and, in turn, would have burdened the ability of fiduciaries to appropriately take ESG factors into account in selecting investments and engaging in risk-return analyses). And consider the letter sent to BlackRock last month by 19 Republican attorneys general,accusing the asset manager of prioritizing its “climate agenda” over the interests of pensioners’ investments. These developments unfortunately fail to appreciate that ESG, properly understood, is merely a collection of quite disparate risks that corporations face, from climate change to human capital to diversity to relations among the board, management, shareholders, and other stakeholders. We write to resituate the role of ESG and stakeholder governance within the well-established legal framework of corporate fiduciary duties.

Dating back to the 1932 law review exchange between Merrick Dodd and Adolf Berle, there has been a long-running debate over whether the purpose of the corporation is to maximize short-term profits for shareholders or, instead, to operate in the interest of all of its various stakeholders to promote the long-term value of the corporation. For several decades, the predominant view among corporate leaders, practitioners, academics, investors, and asset managers was that the role of the corporation was solely to maximize profits for shareholders. This theory, which came to be known as shareholder primacy, is epitomized by Milton Friedman’s seminal 1970 essay, The Social Responsibility Of Business Is to Increase Its Profits, in which he argued that every corporation should seek solely to “increase its profits within the rules of the game.” Friedman’s shareholder-centric view of corporate purpose posited that a corporation that “takes seriously its responsibilities for providing employment, eliminating discrimination, avoiding pollution and whatever else may be the catchwords of the contemporary crop of reformers” would undermine “the basis of a free society.”

We long have advocated for a broader view of corporate purpose than that espoused by Friedman — initially, as we wrote in 1979 in Takeover Bids in the Target’s Boardroom, to empower boards to take into account the interests of all stakeholders, including the communities in which corporations operate, in repudiating takeover bids by opportunistic raiders; and later, to ensure that directors are encouraged to resist short-termist pressures and can exercise their business judgment to consider the variety of stakeholder interests essential to promoting sustainable success and growth in long-term corporate value. The 2008 financial crisis laid bare the dangers of the Friedman doctrine and marked the decline of shareholder primacy, exposing the reality that an exclusive focus on short-term maximization of shareholder value came at the expense of sustainable growth and innovation. Business leaders, policymakers, and investors have since increasingly advocated for a broader view of corporate purpose, one that promotes the long-term value of the corporation.

The growing acceptance of stakeholder corporate governance is captured by, among other developments, the World Economic Forum’s publication of :{The New Paradigm:(style="background-color:#ffff66;"):}::{: A Roadmap for an Implicit Corporate Governance Partnership Between Corporations and Investors to Achieve Sustainable Long-Term Investment and Growth:(style="background-color:#ffffff;"):}:; the Davos Manifesto 2020 (see our prior memo here); and the Business Roundtable’s 2019 rejection of the shareholder-centric view to which it had held firm over the prior two decades (see our prior memo here). Stakeholder corporate governance’s acceptance is also seen in the many actions and investments by corporations intended to benefit stakeholders, including investors and non-investor constituencies, and to reduce negative externalities.

The term “ESG” was popularized in the early 2000s following the publication of the UN Global Compact’s report, Who Cares Wins. Today, the concept of ESG is multifaceted: companies and boards take into account ESG and stakeholder considerations when developing and delivering products and services, making business decisions, managing risk, developing long-term strategy, recruiting and retaining talent and investing in the workforce, implementing compliance programs, and crafting public disclosures. Many major asset managers, including BlackRock, State Street, and Vanguard as well as actively managed funds, consider ESG issues in formulating investment strategies, serving their clients, and exercising their fiduciary responsibilities. This encompasses investors being able to exercise their professional judgment in considering ESG-related information when evaluating the risk and return profile of portfolio holdings. Certain ESG investment funds may also invest exclusively in companies that satisfy predetermined ESG standards. And regulators and enforcement authorities develop principles to promote consistency and reliability across ESG disclosures, and scrutinize such disclosures in companies’ public filings.

Thephenomenon of ESG is prevalent not only in the United States but around the world, as companies, policymakers, global leaders, academics, and investors debate how best to promote sustainability over the long term.ESG, properly understood, is not a unitary principle or even a collection of a fixed set of particular principles. Rather, ESG encapsulates the range of risks that all corporations must carefully balance, taking into account their specific circumstances, in seeking to achieve long-term, sustainable value. It is thus no surprise that asset managers and asset owners, too, are expecting well-run companies to incorporate ESG matters into their business decisions appropriately. Although the ESG moniker is relatively recent, corporate boards and management have long considered ESG factors and risks in setting and executing strategy. As Jeffrey Sonnenfeld recently pointed out,doing so is associated with superior financial results, and consistent with long-accepted norms as to the place of business in society.

To be sure, not all market participants embrace ESG principles. Recently, an anti-ESG movement has emerged, one opposed to consideration of ESG factors in investment decision-making in favor of a Friedmanist exclusive focus on shareholder primacy. This false dichotomy between ESG and shareholder value mirrors the confusion sewn by critics of stakeholder governance who pit shareholders against other stakeholders through the misleading allure of an existential conflict that requires directors to choose between value for one versus the other. But as we have previously explained here and here, the law of corporate fiduciary duties nowhere demands that choice — and opponents of stakeholder governance know it, as do critics of ESG. The purpose of a corporation is to conduct a lawful, ethical, profitable, and sustainable business in order to ensure the success and grow the value of the corporation over the long term. This requires consideration of all of the stakeholders critical to the success of the business (shareholders, employees, customers, suppliers, and communities), as determined by directors based on their business judgment and informed by regular engagement with shareholders. Such consideration includes ensuring that a company avoids ESG blindspots.

The first principle of corporate law is that a corporation must conduct lawful business by lawful means. To honor this axiom, the Caremark doctrine requires that companies have in place information and reporting systems reasonably designed to provide timely, accurate information to allow management and the board to reach informed judgments about the corporation’s compliance with law and its business performance. The stakeholder governance model aligns closely with Caremark— for example, environmental risks have long been a core focus of compliance programs, and to the extent a company adequately addresses these risks through comprehensive compliance programs and operational adjustments, it will be well-positioned to meet the demands of the environmental component of ESG. As we recently wrote, it is important for companies to have high-quality risk management policies and processes, and for boards to oversee the monitoring and management of risk, to protect the long-term value of the company, and to fulfill Caremark duties. Risk management policies and oversight must reach ESG and sustainability-related risks that can damage and disrupt a company’s strategies, business positioning, operations, and relations with stakeholders, including over the long term.

A holistic, stakeholder view of corporate purpose does not exalt ESG as the sole or weightiest consideration — to the contrary, it recognizes that the various elements of ESG are among numerous considerations that are essential to a company’s sustainability and that must be carefully balanced by the board and management, in consultation with shareholders, to ensure the long-term health and prosperity of the business. One example, highlighted by BlackRock in its written response to the attorneys general, is the long-term risk to companies posed by climate change and the economic opportunities from the energy transition. By engaging with shareholders and thought leaders on these complex topics, management teams and boards can arm themselves with the knowledge necessary to understand the relevant risks and to develop strategies to support sustainable growth.

The unfortunate confusion that has entered the contemporary debate regarding ESG misunderstands the fundamental purpose of the corporation. We continue to believe it is essential that boards operate under a governance model that permits consideration of ESG principles and sustainable investment strategies, with the support of investors and asset managers, to promote long-term corporate value and to fortify the enterprise against relevant risks. There should be no doubt that the law in Delaware and in every other U.S. jurisdiction empowers boards to follow this course for responsible corporate stewardship and corporate success.

Corporate purpose, ESG, Shareholder value, Stakeholders, Stewardship, Sustainability

https://www.alternet.org/2020/09/study-reveals-how-stakeholder-capitalism-fails-to-live-up-to-promises-as-corporations-continue-putting-profits-over-people/

no linx twt

Study reveals how ‘stakeholder capitalism’ fails to live up to promises as corporations continue putting profits over people

Written by Kenny Stancil / Common Dreams September 23, 2020

When the Business Roundtable issued a statement on corporate purpose and promised to “deliver value to all of… our stakeholders” in 2019, some applauded the attention paid to social and environmental concerns by 181 CEOs as a significant improvement from neoliberal economist Milton Friedman’s 1970 dictate that “the social responsibility of business is to increase its profits,” which marked the beginning of an era of shareholder primacy.

But a study (pdf) published Tuesday by the Test of Corporate Purpose (TCP) initiative showed that amid 2020’s disastrous public health, economic, social, and environmental challenges—the coronavirus pandemic, massive unemployment and worsening inequality, persistent police violence and racial injustice, and intensified climate crisis—”stakeholder capitalism” has failed to follow through on its promises to do more to benefit workers and communities, continuing to “put profits ahead of people” instead.

Joshua Bolten, president of the Business Roundtable (BRT), told the New York Times that he thinks corporations “have done exceptionally well” in supporting employees during the unprecedented crisis set in motion by Covid-19.

But Times reporter Peter Goodman painted a different picture. When large technology company Salesforce “celebrated more than $5 billion in quarterly sales… in late August,” its chief executive, Marc Benioff—a self-styled “evangelist for stakeholder capitalism”—declared victory, explained Goodman. “The next day, in the midst of the pandemic, Salesforce informed 1,000 employees that their jobs were no longer needed.”

In March, Arne Sorenson—president and CEO of Marriott International and co-chairman of a BRT task force convened to address Covid-19—”announced that he was furloughing tens of thousands of employees, asserting that his hand had been forced by the swift deterioration of the business,” wrote Goodman. “Less than two weeks later, Marriott paid out $160 million in dividends to shareholders.”

TCP’s study, which was conducted with KKS Advisors and supported by the Ford Foundation, summarized the “conundrum” this way: “The interests of stockholders and other stakeholders will not always align.”

The analysis showed that U.S. companies that signed the BRT statement “performed no better than their nonsignatory counterparts through the 2020 crises.”

Researchers pointed to stock buybacks, political spending, tax evasion, and unchecked pollution as additional examples of practices reflecting the continued prioritization of shareholder interests despite pledges to pursue “inclusive prosperity” for all stakeholders.

In the words of the report’s authors, many companies still “campaign for one world while publicly proclaiming a vision of another.”

The report noted that only a handful of the signatories to the BRT statement even submitted it to their companies for approval, which is why some scholars have argued that the promises made by proponents of “stakeholder capitalism” are a public relations gimmick that will not improve social welfare.

On social media, commentators such as Krystal Ball and Bharat Ramamurti concurred. Ramamurti, the managing director of the Roosevelt Institute’s Corporate Power Program, wrote: “The way to change corporate behavior is with new laws. Press releases won’t cut it.”

According to Goodman, “The study enhances doubts that corporations can be depended upon to moderate their quest for profits to pursue solutions to challenges like climate change, racial injustice, and economic inequality.”

Proponents of a genuinely just and sustainable society like Marjorie Kelly, executive vice president of The Democracy Collaborative, have criticized the BRT statement while arguing that what’s known as the triple-bottom-line approach to business—people, planet, and prosperity—is a step in the right direction.

Kelly cautioned against viewing companies’ simultaneous pursuit of multiple interests as inherently disingenuous, pointing to “national brands as diverse as Ben & Jerry’s, Amalgamated Bank, and King Arthur Baking” that govern themselves according to formal commitments giving “social and environmental benefits equal standing with profit goals.”

One key to differentiating the mission-driven enterprises truly committed to the creation of an equitable and ecological economy from those corporations for whom social responsibility is a marketing ploy is to analyze the gap between rhetoric and practice, Kelly argued.

The study noted: “Given the enormous influence major corporations have over the trajectory of policy and regulation, no analysis of corporate purpose and its alignment with a stakeholder primacy model would be complete without incorporating an evaluation of companies’ lobbying and political spending activities,” which often contradict the information coming from marketing departments.

Fidelity to progressive economic and environmental policies, or lack thereof, provides another clue. In addition to well-known instances of greenwashing and pinkwashing, political scientist Cedric Johnson has called attention to the ‘blackwashing‘ at play when, for example, Amazon CEO Jeff Bezos adamantly pledged his support for Black Lives Matter even though “the company fired Chris Smalls, a black Amazon worker who led a walkout at the end of March demanding more protective gear and hazard pay.”

Economists Emily Kawano, former director of the Center for Popular Economics, and Julie Matthaei, co-founder of the U.S. Solidarity Economy Network, argued that profit-maximization is intrinsic to capitalism and the privately owned corporations that characterize it, so even the “stakeholder” variety is incapable of balancing moneymaking with competing objectives like greater equality and sustainability.

According to Kawano, Matthaei, and other proponents of public goods and a cooperative model of social wealth-building, successfully prioritizing human and environmental well-being will require moving toward a non-capitalist economy based around democratic ownership.

Now “would be a great time to push for real reforms,” Chuck Collins, director of the Institute for Policy Studies’ Program on Inequality, told Common Dreams. “Why shouldn’t Amazon or any of the hundreds of companies that are benefiting from pandemic conditions share their ownership with employees?”

“Any talk of corporations being responsive to a broad spectrum of stakeholders is just that—talk—as long as stakeholders don’t have power,” said Kelly. “And power means ownership.”

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8/19 art'l yesterday ceo ~ profit max, vs ceo$ max, //?

https://www.alternet.org/2019/08/financial-journalist-explains-why-shareholder-democracy-and-milton-friedman-economics-have-failed-miserably/}:

no lnx

Financial journalist explains why ‘shareholder democracy’ and Milton Friedman economics have failed miserably

Written by Alex Henderson August 20, 2019

“Shareholder democracy” is an economic theory that was aggressively promoted by the late Milton Friedman, the conservative University of Chicago economist who served as an adviser to President Ronald Reagan as well as British Prime Minister Margaret Thatcher.According to “shareholder democracy,” a corporation’s #1 responsibility is to its shareholders — not the good of society at large — and “shareholder democracy” as preached by Friedman influenced everything from Reaganomics to neoliberalism to the Libertarian Party. But Andrew Ross Sorkin (author of the 2009 book “Too Big to Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System — and Themselves”) explains in a New York Times article that in 2019, more and more Americans are rethinking “shareholder democracy” and coming to view it as detrimental to the greater good.

“For nearly a half-century,” Sorkin explains, “Corporate America has prioritized, almost maniacally, profits for its shareholders. That single-minded devotion overran nearly every other constituent, pushing aside the interests of customers, employees and communities

Friedman, Sorkin notes, scoffed at the concept of corporate responsibility, asserting in 1970, “What does it mean to say that ‘business’ has responsibilities? Businessmen who talk this way are unwitting puppets of the intellectual forces that have been undermining the basis of a free society these past decades.”

But in 2019, according to Sorkin, one is seeing a resurgence of what used to be called “managerialism” — essentially, a belief that corporations need to be concerned about employees, communities and society’s greater good and not simply shareholders. There were hints of managerialism, Sorkin says, in aBusiness Roundtable statement released on Monday — when leaders of major companies ranging from Apple and Amazon to JPMorgan Chase issued a joint statement noting that employees and communities should matter to companies along with shareholders.

Sorkin attributes this statement in part to “public outrage” and a growing populism.

“Americans mistrust companies to such an extent that the very idea of capitalism is now being debated on the political stage,” Sorkin asserts. “Populism has been embraced on both ends of the political spectrum, whether in the trade protectionism of President Trump or the social-net supremacy of Sen. Bernie Sanders.”

Indeed, Sanders’ popularity shows a shift in the United States’ political landscape. The self-described “democratic socialist” has achieved much greater prominence in U.S. politics than he had in the 1990s or 2000s, and recent polls on the 2020 Democratic presidential primary have found him battling for the #2 position with the decidedly liberal/progressive Sen. Elizabeth Warren.

Reflecting on the effects of “shareholder democracy,” Sorkin explains that in the past, “Shareholders and, in turn, a new class of investors known as corporate raiders convinced executives to slash any and all fat from their budgets or risk being taken over or voted out. Layoffs increased, research and development budgets were cut, and pension programs were traded for 401(k)s. There was a rush of mergers driven by ‘cost savings’ that grabbed headlines while profits soared and dividends increased.”

The debate on “corporate democracy” versus “managerialism,” Sorkin stresses, will rage on — and not everyone in the business world agrees with the Business Roundtable statement issued on Monday.

“For whatever progress may have been made Monday, it is hardly clear the debate is over,” Sorkin explains. “In fact, the fight for corporate identity is just beginning.”

see extraction:

Shoshana Zuboff, author of The Age of Surveillance Capitalism, talked about the growing business of collecting and selling consumer data (video interview 2/19.

extraction is the new biz model, all sorts of only marginally related corps (like insurance?) are moving into the space b/c it's the only one that has chance of extending the kind of profits/loot of tech?!

Zucked: Waking Up to the Facebook Catastrophe Roger Mcnamee, The Curse of Bigness: Antitrust in the New Gilded Age Tim Wu Video panel discussion 2/19 also Artificial Unintelligence Broussard.

Here’s What Google and Facebook Know About You—And What You Can Do About It: Both companies keep treasure troves of deeply personal data on users. 3/18.

Panel Discussion on Big Data Panelists included Cathy O’Neil, author of Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy, and Tim Wu, author of The Attention Merchants: The Epic Scramble to Get Inside Our Heads. 9/17. BookTV video (see also We are Data.

819 art'l yesterday ceo ~ profit max, vs ceo$ max, //?

https://www.alternet.org/2019/08/financial-journalist-explains-why-shareholder-democracy-and-milton-friedman-economics-have-failed-miserably/

no lnx

Financial journalist explains why ‘shareholder democracy’ and Milton Friedman economics have failed miserably

Written by Alex Henderson August 20, 2019

Sorkin attributes this statement in part to “public outrage” and a growing populism.

“For whatever progress may have been made Monday, it is hardly clear the debate is over,” Sorkin explains. “In fact, the fight for corporate identity is just beginning.”

nyt debate

A Duty to Shareholder Value

Stephen Bainbridge STEPHEN BAINBRIDGE, AUTHOR, "CORPORATE GOVERNANCE AFTER THE FINANCIAL CRISIS"

Corporations Don’t Have to Maximize Profits

Lynn Stout LYNN STOUT, AUTHOR, "THE SHAREHOLDER VALUE MYTH"

Social Good Is Not Inconsistent with Profit

Tamara C. Belinfanti TAMARA C. BELINFANTI, PROFESSOR, NEW YORK LAW SCHOOL

It’s Law, But It Shouldn’t Be

David G. Yosifon DAVID G. YOSIFON, LAW PROFESSOR, SANTA CLARA UNIVERSITY

https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/its-law-but-it-shouldnt-be

SCU

Most large businesses buy their corporate charters from the state of Delaware. And the law of Delaware is clear about corporate purpose. The chief justice of the Delaware Supreme Court, Leo Strine, put it simply in a recent law review article: “Directors must make stockholder welfare their sole end.” In cases where directors have acknowledged sacrificing shareholder interests for other groups, Delaware courts have found those directors violated their fiduciary duties. But is this standard for corporate governance — shareholders over all — good for society?

Advocates of shareholder value as the “sole end” of corporate governance say that such a rule is necessary to protect stockholders, since they have no control over corporate operations and get nothing unless the firm profits. They insist that bad conduct should be restrained not by corporate law reform, but by external governmental regulation, like labor, consumer or environmental protection statutes. Sometimes, a business's path to profit relies on, or coincides with, treating non-shareholders — such as employees and consumers — responsibly. Firms that treat workers well may attract better workers and firms that respect consumers may get more business. But another path to profit involves exploiting non-shareholders. Those companies may get rich by, say, skimping on worker safety, invading consumer privacy, or polluting the environment.

But government is not insulated from corporate influence. Firms that work to serve shareholders often do so both in the market and in the halls of government. Corporations campaign and lobby to block the very regulations that shareholder primacy advocates call on the government to create to protect non-shareholders. And because of the Citizens United ruling, corporations have a constitutional right to such political activity.

As long as Citizens United is good constitutional law, shareholder primacy will be bad for society. If we cannot keep corporations out of our democracy, then we must have more democracy in our corporations. Corporate law should be reformed to require attention to non-shareholder interests in the boardroom.

A Good Corporate Accounting of Social Costs Is Needed

Jean Rogers JEAN ROGERS, SUSTAINABILITY ACCOUNTING STANDARDS BOARD

There is a common belief that corporate directors have a legal duty to maximize corporate profits and “shareholder value” — even if this means skirting ethical rules, damaging the environment or harming employees. But this belief is utterly false. To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”

The Hobby Lobby case dealt with a closely held company with controlling shareholders, but the Court’s statement on corporate purpose was not limited to such companies. State codes (including that ofDelaware, the preeminent state for corporate law) similarly allow corporations to be formed for "any lawful business or purpose,” and the corporate charters of big public firms typically also define company purpose in these broad terms. And corporate case law describes directors as fiduciaries who owe duties not only to shareholders but also to the corporate entity itself, and instructs directors to use their powers in “the best interests of the company.”

Serving shareholders’ “best interests” is not the same thing as either maximizing profits, or maximizing shareholder value. "Shareholder value," for one thing, is a vague objective: No single “shareholder value” can exist, because different shareholders have different values. Some are long-term investors planning to hold stock for years or decades; others are short-term speculators.

More to the point, corporate directors are protected from most interference when it comes to running their business by a doctrine known as the business judgment rule. It says, in brief, that so long as a board of directors is not tainted by personal conflicts of interest and makes a reasonable effort to stay informed, courts will not second-guess the board’s decisions about what is best for the company — even when those decisions predictably reduce profits or share price.Also, most investors care not only about their portfolios, but also about their jobs, their tax burdens, the products they buy and the air they breathe. Which is to say, companies that maximize profits by firing employees, avoiding taxes, selling shoddy products or polluting the environment can harm their shareholders more than helping them.

Outside the rare case of a public company that decides to sell itself to a private bidder, the business judgment rule gives directors nearly absolute protection from judicial second-guessing about how to best serve the company and its shareholders.

Although some Delaware cases talk about maximizing shareholder value in the long run, Delaware (like other states) applies the business judgement rule to protect directors of corporations that reduce profits and share price when directors claim this will ultimately help the corporation. In the 2011 case of Air Products, Inc v. Airgas, the business judgement rule allowed Airgas directors to refuse to sell the company, even though a sale would have given Airgas' shareholders a hefty profit.

So, where did the mistaken idea that directors must maximize shareholder value come from? The notion is especially popular among economists unburdened by knowledge of corporate law. But it has also been embraced by increasingly powerful activist hedge funds that profit from harassing boards into adopting strategies that raise share price in the short term, and by corporate executives driven by “pay for performance” schemes that tie their compensation to each year’s shareholder returns.

In other words, it is activist hedge funds and modern executive compensation practices — not corporate law — that drive so many of today’s public companies to myopically focus on short-term earnings; cut back on investment and innovation; mistreat their employees, customers and communities; and indulge in reckless, irresponsible and environmentally destructive behaviors.

dodge v ford newmark v ebay profit max corp:

https://www.litigationandtrial.com/2010/09/articles/series/special-comment/ebay-v-newmark-al-franken-was-right-corporations-are-legally-required-to-maximize-profits/

Max Kennerly

eBay v. Newmark: Al Franken Was Right, Corporations Are Legally Required To Maximize Profits

:{:(style="background-color:#ffffff;"):}:**:{Update, May 2012:(style="margin:0px;padding:0px;border:0px;outline:0px;font-weight:normal;vertical-align:baseline;text-decoration-line:underline"):}:**:{: Leo E. Strine, Jr., Chancellor of the Delaware Court of Chancery, :(style="background-color:#ffff66;"):}:referenced this post in his thoughtful new law review article, *[Our Continuing Struggle With the Idea That For-Profit Corporations Seek Profit*, 47 Wake Forest L. Rev. 135 (2012).]

**:{Updates:(style="margin:0px;padding:0px;border:0px;outline:0px;font-weight:normal;vertical-align:baseline;text-decoration-line:underline"):}:**: [Francis Pileggi has his take (courtesy of a guest blogger), as does Steven Davidoff at DealBook.

Also, Todd Henderson has a riposte. He’s right that most companies can engage in modestphilanthropic efforts without worry, but if a company starts putting its money where its mouth is on philanthropy, they’ll get eBay’d, just like craigslist was. Craigslist didn’t engage in “purely philanthropic ends,” they tried to protect the frugal, community-centric corporate culture that was a hallmark for their success. The Court held: no, sorry, can’t do that, because that conflicts with your duty to maximize shareholder value. Thus, the duty to maximize profits isn’t, as Henderson said, a “canard.” It’s an enforceable — albeit rare, since most corporations willingly maximize profits — legal doctrine, and it was just enforced against craigslist.]

Remember all the complaining conservative corporate law professors did back when Senator Al Franken decried the profit-seeking motives of corporations?

Here was Todd Henderson:

In a recent speech at the Netroots Nation, Senator Al Franken tried to frighten the crowd by trotting out the corporate bogeyman that greedily makes decisions without regard to anything other than profit. Franken told them: “it is literally malfeasance for a corporation not to do everything it legally can to maximize its profits.” Individuals across the political spectrum share this common canard. Those on the right, like Milton Friedman, argue that the shareholder-wealth-maximization requirement prohibits firms from acting in ways that benefit, say, local communities or the environment, at the expense of the bottom line. Those on the left, like Franken, argue that the duty to shareholders makes corporations untrustworthy and dangerous. They are both wrong.

While the duty to maximize shareholder value may be a useful shorthand for a corporate manager to think about how to act on a day to day basis, this is not legally required or enforceable ….

Under this legal regime, it is not malfeasance for boards or corporate chiefs to make decisions that do not maximize shareholder value.

And here was Stephen Bainbridge, following up on Henderson:

I agree. Indeed, I’ve made this point in my own writing on corporate social responsibility. See, e.g., The Bishops and the Corporate Stakeholder Debate. As I explain therein, however, while the business judgment rule has the effect of giving directors latitude to make decisions that deviate from the shareholder wealth maximization norm, that is not the purpose of the rule.

The fact that corporate law does not intend to promote corporate social responsibility, but rather merely allows it to exist behind the shield of the business judgment rule becomes significant in — and is confirmed by — cases where the business judgment rule does not apply.

Larry Ribstein jumped in, too: “The Franken misconception is widely espoused by those in the radical anti-corporate camp, such as the author of the widely read screed The Corporation.”

Somebody better tell that to the “radical anti-corporate camp” at the DelawareCourt of Chancery, lead by Chancellor William B. Chandler, III, since apparently he’s doing it all wrong over there:

Jim and Craig did prove that they personally believe craigslist should not be about the business of stockholder wealth maximization, now or in the future. As an abstract matter, there is nothing inappropriate about an organization seeking to aid local, national, and global communities by providing a website for online classifieds that is largely devoid of monetized elements. Indeed, I personally appreciate and admire Jim’s and Craig’s desire to be of service to communities. The corporate form in which craigslist operates, however, is not an appropriate vehicle for purely philanthropic ends, at least not when there are other stockholders interested in realizing a return on their investment. Jim and Craig opted to form craigslist, Inc. as a for-profit Delaware corporationand voluntarily accepted millions of dollars from eBay as part of a transaction whereby eBay became a stockholder. Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form. Those standards include acting to promote the value of the corporation for the benefit of its stockholders.The “Inc.” after the company name has to mean at least that. Thus, I cannot accept as valid for the purposes of implementing the Rights Plan a corporate policy that specifically, clearly, and admittedly seeks notto maximize the economic value of a for-profit Delaware corporation for the benefit of its stockholders—no matter whether those stockholders are individuals of modest means or a corporate titan of online commerce. If Jim and Craig were the only stockholders affected by their decisions, then there would be no one to object. eBay, however, holds a significant stake in craigslist, and Jim and Craig’s actions affect others besides themselves.

That’s from the newly-released *eBay v. Newmark* opinion, courtesy of Francis G.X. Pileggi. I leave the reader to their own conclusions as to how a team of corporate law professors were bested in their understanding of fiduciary duties by a comedian.

Before we get to the merits of the eBay opinion, first things first: in additional to being one of the most influential corporate jurists in the country, Chancellor Chandler is known for the hilarious footnotes he inserts into his opinions, like when he relied upon that other famous legal scholar, 50 cent, to define the meaning of “whips.” (I highly recommend that His Honor review the fine fiddy scholarship undertaken by @English50cent.)

This time around, it’s footnote 23:

For example, during negotiations, Price sent an email to eBay executives explaining that Jim and Craig understood that if they insisted eBay sign a non-compete agreement it would be “a defcon 5/deal breaker issue” for eBay. PTX-30 (email from Garret Price to eBay executives (June 24, 2004)). I include this email in the story (1) to illustrate how strongly eBay felt about maintaining the right to compete and (2) because we all appreciate a good reference now and then to the Defense Readiness Condition (“DefCon”) of the armed forces. A good DefCon reference, however, is even betterwhen it makes use of the appropriate DefCon level. Accordingly, Price’s DefCon reference would have been more adept if he had used DefCon 1, which signals “maximum force readiness.” SeeDescription of DefCon Defense Condition, Federation of American Scientists, http://www.fas.org/nuke/guide/usa/c3i/defcon.htm (last visited August 12, 2010); see alsoWARGAMES (Metro-Goldwyn-Mayer 1983)(Dr. McKittrick: “See that sign up here—up here. ‘DefCon.’ That indicates our current ‘def’ense ‘con’dition. It should read ‘DefCon 5,’ which means peace. It’s still 4 because of that little stunt you pulled. Actually, if we hadn’t caught it in time, it might have gone to DefCon 1. You know what that means, David?” David: “No. What does that mean?” Dr. McKittrick: “World War Three.”). Price, however, referenced DefCon 5, which merely signals “normal peacetime readiness.” I assume, therefore, that Price’s reference to DefCon 5 is notan accurate characterization of what eBay’s negotiation stance would have been had Jim and Craig fired a mandatory non-compete across eBay’s bow.

Now, on to the merits.

In short, eBay purchased a minority stake in craigslist a few years ago, making them one of three shareholders in the company, the other two of which (Jim and Craig) have been pretty much in lockstep since the founding of the company. eBay knew that it was walking into a company with completely different values from its own, a company with a peculiar and iconic corporate culture that forsake typical emphasis on growth and profit maximization for a sense of Internet community and frugality.

Since eBay knew that it was entering into a relationship with majority shareholders who did not share its values, it contracted to protect itself as part of the purchase. I could not help but think while reading the first 40 or so pages of the opinion — in which the relationship sours, and so the majority owners, Jim and Craig, start looking for ways to minimize eBay’s present and future influence and/or encourage them to sell — that the case was very specific to these particular facts, because it revolved around the measures eBay took to protect itself via the shareholder agreement when it bought that minority ownership.

The Chancellor seemed to think the same thing:

Throughout this dispute, I have repeatedly read and listened to what look and sound like breach of contract arguments, which eBay uses not to prove Jim and Craig breached a contract, but rather to prove Jim and Craig breached their fiduciary duties. This has been an odd exercise, andI admit I am puzzled by eBay’s decision not to bring a breach of contract claim or, more promising perhaps, a claim for breach of the implied covenant, considering eBay expended significant effort arguing that the 2008 Board Actions violated both the technical provisions and the spirit of the SPA and the Shareholders’ Agreement. The fact remains, however, that eBay asserted neither a breach of contract claim nor a claim for breach of the implied covenant. Therefore, I make no ruling on whether Jim and Craig breached the SPA, the Shareholders’ Agreement, or the implied covenant of good faith and fair dealing by implementing the 2008 Board Actions. The legal conclusions in this Opinion only relate to whether Jim and Craig breached the fiduciary duties they owe to eBay by implementing the 2008 Board Actions.

So be it. Those Board Actions were:

(1) adopting a rights plan that restricted eBay from purchasing additional craigslist shares and hampered eBay’s ability to freely sell the craigslist shares it owned to third parties, (2) implementing a staggered board that made it impossible for eBay to unilaterally elect a director to the craigslist board, and (3) seeking to obtain a right of first refusal in craigslist’s favor over the craigslist shares eBay owns by offering to issue one new share of craigslist stock in exchange for every five shares over which any craigslist stockholder granted a right of first refusal in craigslist’s favor.

Chancellor Chandler found that the first and third violated Jim and Craig’s fiduciary duties to the company, and so rescinded those actions. It’s a “win” for eBay, sort-of. I bet they would trade winning on the first if they could get the second.

Gordon Smith has an early take on it over at The Conglomerate, viewing it as a minority shareholder oppression case. In the classic minority shareholder oppression case, the more powerful interests are actively trying to drive out the minority shareholder and/or diminish the value of that minority shareholder’s interest. (Here’s one of a trillion law review articles on such oppression.)

I think that’s true for the right of first refusal issue: without without getting into too much detail, the actual working of that right of first refusal would effectively make eBay’s shares worth less than those of Jim and Craig. That is plain-vanilla minority shareholder oppression, and, as a plaintiff’s lawyer, I’m glad to see the impropriety of that recognized even in a corporation with such few shareholders (i.e., three).

But I don’t see the same type of oppression with regard to the rights plan, which is the part that prompted the discussion of the profit-maximization role of corporations. In the rights plan, Jim and Craig set in place a number of ownership protocols that would hinder the ability of eBay to acquire further interests in the event that Jim or Craig died. As Chancellor Chandler characterized it, Jim and Craig were trying “shape the future of the space-time continuum.” The nominal corporate purpose of the rights plan was not to benefit Jim or Craig — they would be dead, of course — but to help preserve the corporate culture at craigslist, since they knew eBay, if it took over, would try to mold craigslist more towards eBay’s short-term profit-maximization culture.

Unlike Chancellor Chandler, I don’t think Jim and Craig did anything wrong by trying to protect the frugal, community-centered corporate culture at craigslist. Although it is certainly reasonable to presume that, in general, a shareholder invests in a for-profit Corporation for the purpose of maximizing their returns, it’s not like eBay bought shares of Halliburton and then watched as Halliburton forsake war in favor of soup kitchens and music programs for kids. It’s not *Dodge v. Ford*.

Instead, eBay knowingly and voluntarily bought a piece of Jim and Craig’s frugal, community-centered company. As such, the fiduciary duty owed by Jim and Craig to eBay has to be viewed in the context of the company itself – a company renowned for its tiny size, community service mindset, and its refusal to adopt typical principles of short-term profit-maximization.

That is to say, although Franken was right in general about the fiduciary duties corporate directors owe their shareholders — and, undoubtedly, most corporate directors presume that their duty is to maximize profit and most shareholders would sue to enforce that — I think those general principles should be considered in light of the specifics of each company. For better or for worse, eBay bought a piece of craigslist, not some generic ideal of a corporation, and they should be held to that. The idea of an arms’-length transaction among businesses works both ways; craigslist formed a for-profit “Inc.,” but eBay knowingly invested in an “Inc.” with a tangibly different idea of “for-profit.” As Joshua Fershee notes, Jim and Craig credibility testified that craigslist’s community service mission “is the basis upon which our business success rests. Without that mission, I don’t think this company has the business success it has.'” Jim and Craig had good and sound business reasons for their decision to protect the highly successful, if idiosyncratic, corporate culture at craigslist, and that decision should be protected by the business judgment rule.

But what I think should be the law — and what a couple politically-biased professors claim is the law — isn’t necessarily the law. Under eBay v. Newman, the law is as Franken said: “it is literally malfeasance for a corporation not to do everything it legally can to maximize its profits.” Just ask Jim and Craig; no one disputes it’s their company, but they’re legally prohibited from taking steps to preserve the profit-alongside-community-service mission that’s served them well. Maximize profits, or else.

The impact of this duty-to-maximize-profits stretches far beyond mere investments. Under *Citizens United*, corporations now have the First Amendment right to influence our fragile democracy however they want, since they’re “people,” just like you and me, albeit profit-maximizing zombies who care not for truth, justice, or the American way.

That being the case, maybe we should spend less time listening to the Hendersons, Bainbridges, and Ribsteins, and more time listening to Lawrence Lessig. Maybe it’s time for us real, living, breathing citizens to stop acting like we’re at DefCon 5.

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