Re:Twitter board adopts poison pill after Musk’s $43B bid to...
by LocalPCGuy on Saturday April 16, 2022 @11:57PM
(#31058348)
I'm not a corporate lawyer, and by no means an expert, but I think this is propagating one of the great myths of the last 40 years or so. Profits/finances are not the sole-arbiter of success, even in for-profit companies. A fiduciary duty is not simply to profits, but to the success of the company (however it and the shareholders measure it). Granted, they likely need money to continue with whatever is their measure of success. There will always be those that feel that the sole duty of a company is to profit, but that doesn't mean they are correct.
Re:Twitter board adopts poison pill after Musk’s $43B bid to...
by tsimionescu on Sunday April 17, 2022 @01:57AM
(#31058838)
Ok, try to find a breach of fiduciary duty trial that didn't involve profits (discussing a for-profit company, not a public benefit company or other organization).
The famous Dodge v Ford was about Ford increasing employee wages and reducing prices, at the cost of profits. One of his main motivations was to avoid paying out dividends to the Dodge brothers, who were using said dividends to bootstrap their own car company. The trial found that Ford has ample leeway in running the company as he sees fit, but can't simply ignore profit completely or do things with the sole purpose of avoiding profit.
Re:Twitter board adopts poison pill after Musk’s $43B bid to...
by LocalPCGuy on Monday April 18, 2022 @12:10PM
(#31072637)
That trial specifically seems pretty specific to his attempt to avoid paying the Dodge brothers. And I'm not saying the courts don't sometimes say that profits are the most important thing, and I'm not even saying they aren't important. But that it's not the sole thing (or even the definition of) fiduciary and so a board of directors could, as fiduciaries, make decisions at the expense of maximizing profit.
Yes, but that's still a profit based motivation. My point was that the board of a for-profit company doesn't have a fiduciary duty to represent non-financial interests of the company or shareholders.
That is, you can't sue the board of a for-profit company because they didn't uphold their fiduciary duty to represent your interest of having a free-speech platform, even if you had made it very clear that to you this is much more important than profits, and even if you owned 100% of shares [well, you can sue, but the case will be quickly thrown out]
Conversely, the board can always claim that they made free speech a priority because they believe that will help drive long term profits, even if shareholders asked them to focus on profits to the detriment of free speech, and even if profits immediately tanked after this decision; and they will likely win in a trial.