Lee, I'm on Eric's side on this. See below.
Lee Mairs wrote:
>
> Corporations are giving away resources that do not belong to them!
On the contrary, corporations have a duty to their stock holders to
spend money as necessary to ensure the success of the corporation, and
ultimate profits to them. The very foundation of buying stock is
"Here's my money, please spend it to make more money".
> Publicly traded companies
> have a responsibility to maximize the wealth of their stockholders (while
> remaining within the rules of the game).
And avoiding bad publicity is an excellent way to do so. As Inch's
original post demonstrated quite well, it is sometimes necessary to
donate to charity in order to avoid bad publicity. The good publicity
(from announcements like the one in the Times) is an added bonus.
> It is irresponsible and a
> violation of their fiduciary responsibility to stockholders to give away
> their wealth--receiving nothing in return that would result in an
> subsequent increase-- without the permission of the stockholder.
Nope, wrong again. The exact mechanism varies somewhat, but the
stockholders do not run the company. Generally, they vote for a board
of directors who guide the company in a general sense, and perhaps
approve overall budgets. Major decisions get approved by the board, but
minor ones are left to CEOs and other people further down the chain of
command. And really, spending $1 million is a fairly minor decision for
all the auto makers, probably less than 1/20 of their annual advertising
budget.
> If
> stockholders desire to donate, they can do so from their own wealth or the
> wealth that the company has accumulated for them through the price of their
> stock.
A nice theory, but it results in far less money going direct to the
needy, and 1/2 or more going to the IRS.
> The insight that Robert Bork has made
Somehow, I wouldn't look to Robert Bork as being an authority on how to
run a successful business ... and some would say that the "huge"
consulting fees he received from Netscape indicate that he is in favor
of corporate charity, as long as it's directed to him.
Randall
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