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What it’s like to be on the board of a Fortune 500 company

jayshah.me

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Re: What it’s like to be on the board of a Fortune 500 company

#41

Post by tomc1985 »

briandear wrote: post #39
tomc1985 wrote: post #23

Death to maximizing shareholder value above other concerns, like customers and employees

If shareholders aren't getting value, the company dies.

Only because we cultivate a culture that prioritizes them.

The role of shareholder should be that of stewardship for the steward (the CEO), and both the board and their charge are in positions of servant leadership towards customers (first priority) and employees (second). Focusing on both those points creates the financial success needed to recoup investments.

Re: What it’s like to be on the board of a Fortune 500 company

#42

Post by gamblor956 »

forapurpose wrote: post #25
function_seven wrote: post #14

Earlier quoted context omitted.

I hope it isn't. My 401(k) won't provide for my retirement using Good Feelings. The best interest of the shareholders is running a profitable enterprise.

Shareholders live in the world that the company creates. For example if the company contributes to global warming, it doesn't affect the stock price but it does affect the shareholders. Money and markets are great tools, but they aren't gods; they aren't the answer to all questions.

The question really boils down to over what timeframe is shareholder value measured? A long-term approach would take into account externalities like global warming which affect future business operations and future shareholder value.

A short-term approach would look only to the current price of stock, regardless of all other considerations, justifying such things as massive layoffs, selling off core business assets, etc.

Re: What it’s like to be on the board of a Fortune 500 company

#43

Post by r00fus »

rb808 wrote: post #22
TheAdamAndChe wrote: post #17

Earlier quoted context omitted.

They didn't mention customer satisfaction because it's not always a priority, shareholder value is. A fantastic example of this is Comcast. It is regularly voted America's most hated corporation in the country, yet because of its unique leverage in the areas that it operates, this poor customer satisfaction rating just doesn't matter. They're still able to satisfy the shareholders.

Incidentally I love comcast. 150mbps cable, cheap price, no outages, free hbo, X1 remote rocks. Pricing is a bit annoying (paying extra for HD) but is a great product. Just thought I'd mention it because it gets too much hate.

As much as I dislike Comcast, I voted you up because I once also had this magic serenity for a few years.

Then I switched to Comcast for TV and it all went down the tubes. Random outages (sometimes daily), substandard speeds, Netflix speeds suffering (or stuttering) at peak times, etc.

Who knows whether this just reversion to the mean, or the techs botching the install. Even "reddit trick to email the Comcast VP" didn't fix it (though that did get a quick response).

Re: What it’s like to be on the board of a Fortune 500 company

#44

Post by Johnny555 »

ilamont wrote: post #2

And if a board member isn’t performing well, we get rid of them. I’ve been on boards where the SEC is in there. I’ve been on boards where the Department of Justice is involved. You don’t want that. You destroy companies when you do that. You destroy shareholder value. So what you try to do as board is make sure people are above board. You guard against anything that hurts the companies from an outside perspective. It…

It all comes back to governance and taking care of shareholders.

Which explains why companies are like they are -- if the board had a fiduciary responsibility to employees first and shareholders second, maybe workers would be better off.

Re: What it’s like to be on the board of a Fortune 500 company

#45

Post by JumpCrisscross »

Johnny555 wrote: post #44
ilamont wrote: post #2

And if a board member isn’t performing well, we get rid of them. I’ve been on boards where the SEC is in there. I’ve been on boards where the Department of Justice is involved. You don’t want that. You destroy companies when you do that. You destroy shareholder value. So what you try to do as board is make sure people are above board. You guard against anything that hurts the companies from an outside perspective. It…

It all comes back to governance and taking care of shareholders. Which explains why companies are like they are -- if the board had a fiduciary responsibility to employees first and shareholders second, maybe workers would be better off.

> if the board had a fiduciary responsibility to employees first and shareholders second, maybe workers would be better off

Oh look, it’s New York City’s MTA [1] and NYPD.

Our society puts consumers first, shareholders second and workers like fiftieth. Moving workers up seems reasonable. Skipping them ahead of shareholders or consumers has, historically, been a predictable failure.

[1] https://en.m.wikipedia.org/wiki/Metropolitan_Transportation_...

Re: What it’s like to be on the board of a Fortune 500 company

#46

Post by dragonwriter »

Johnny555 wrote: post #44
ilamont wrote: post #2

And if a board member isn’t performing well, we get rid of them. I’ve been on boards where the SEC is in there. I’ve been on boards where the Department of Justice is involved. You don’t want that. You destroy companies when you do that. You destroy shareholder value. So what you try to do as board is make sure people are above board. You guard against anything that hurts the companies from an outside perspective. It…

It all comes back to governance and taking care of shareholders. Which explains why companies are like they are -- if the board had a fiduciary responsibility to employees first and shareholders second, maybe workers would be better off.

> - if the board had a fiduciary responsibility to employees first and shareholders second, maybe workers would be better off.

If the workers were by definition the shareholders, you wouldn't have to worry about which came first.

Re: What it’s like to be on the board of a Fortune 500 company

#47

Post by hidenotslide »

balthasar wrote: post #36

Why do you keep giving CEOs barrels of money?

This person gets paid 1 million dollars per year for twenty days of not-rocking-the-boat. It's not their money and the only way they get fired is by asking questions like that.

Why investors put up with it is a better question. I think the implicit antitrust of index funds has something to do with it, few investors want more competition. https://www.theatlantic.com/magazine/archive/2017/09/are-ind...

Re: What it’s like to be on the board of a Fortune 500 company

#48

Post by Johnny555 »

JumpCrisscross wrote: post #45
Johnny555 wrote: post #44

Earlier quoted context omitted.

It all comes back to governance and taking care of shareholders. Which explains why companies are like they are -- if the board had a fiduciary responsibility to employees first and shareholders second, maybe workers would be better off.

> if the board had a fiduciary responsibility to employees first and shareholders second, maybe workers would be better off Oh look, it’s New York City’s MTA [1] and NYPD. Our society puts consumers first, shareholders second and workers like fiftieth. Moving workers up seems reasonable. Skipping them ahead of shareholders or consumers has, historically, been a predictable failure. [1] https://en.m.wikipedia.org/wiki…

Keeping the company alive would be a key benefit for workers, so it couldn't go the way of a public agency where their funding comes from "unlimited free money" (aka, taxpayers)

Re: What it’s like to be on the board of a Fortune 500 company

#49

Post by chris11 »

robotresearcher wrote: post #33

> You know Jay, at this level – it’s the White House. Everything needs to be clearly documented and written down. I understand from the Pod Save America people that taking notes is usually avoided at the White House, since they are required to be part of the permanent record and can be subpoenaed. Destroying notes is not allowed, so it's best to not take them in the first place. Naturally the current crowd have their…

> Naturally the current crowd have their own ways.

The whole situation with Michael Wolff is a little worse than staff just taking notes considering he kind of just kept showing up at the White House and got a couple hundred interviews over half a year.

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