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Tim Cook Rejects Politics of the NCPPR

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Re: Tim Cook Rejects Politics of the NCPPR

#51

Post by peterkelly »

mikestew wrote: post #8

" 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.

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.

Re: Tim Cook Rejects Politics of the NCPPR

#52

Post by marcusr »

mikestew wrote: post #8

" 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.

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.

Re: Tim Cook Rejects Politics of the NCPPR

#54

Post by mikestew »

selmnoo wrote: post #27
mikestew wrote: post #8

" 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.

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 rigi…

>(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.

Re: Tim Cook Rejects Politics of the NCPPR

#55

Post by PeterisP »

edias wrote: post #33
mikestew wrote: post #8

" 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.

>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…

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.

Re: Tim Cook Rejects Politics of the NCPPR

#56

Post by icu »

For me this article highlights the tension between long term value creation and the short term quarterly profit perspective of Wall Street.

I think the creation of value comes before Return on Investment (RoI). Creating value is much harder than showing a RoI because value is somewhat intangible and is seen through people's personal values/beliefs. Also it may take time before the value you have created makes its way to the bottom line.

Arguably Apple's brand, and how stakeholders feel about it, increases Apple's ROI for its shareholders.

Do Apple's customers care about environmental issues? I'm sure they do. If Apple ignores this it will eventually hurt Apple's bottom line. Do Apple's employees care about worker safety? Again, I'm pretty sure they do and I'm pretty sure that if Apple's management doesn't pay attention it will eventually hurt the bottom line.

Personally I like the idea of a 'Triple Bottom Line'[1] which acknowledges that businesses can create negative value to parts of society when maximizing profit (negative externalities if you are an Economist).

It sounds to me like Tim Cook internalizes this world view and uses it to steer Apple's corporate decision making. I applaud this and hope that this inspires other big corporations but also the future entrepreneurs on Hacker News.

[1][http://en.wikipedia.org/wiki/Triple_bottom_line]

Re: Tim Cook Rejects Politics of the NCPPR

#58

Post by k-mcgrady »

mikestew wrote: post #8

" 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.

>> 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.

Re: Tim Cook Rejects Politics of the NCPPR

#59

Post by nickff »

rjknight wrote: post #48

I understand and agree with the idea that companies should maximise shareholder value, but I've never understood the argument that shareholder value is exclusively determined by profit. As I see it, the stock market consists of various firms saying "buy our stock, and we will try to achieve X with your investment", where X might be maximum ROI, but I don't understand why it has to be. If I want to found a company whi…

It is also possible that Apple might maximize profit and shareholder value by pursuing philanthropy, if customers see the charity as adding value to the products (, possibly in improved brand image).

Re: Tim Cook Rejects Politics of the NCPPR

#60

Post by mongol »

rjknight wrote: post #48

I understand and agree with the idea that companies should maximise shareholder value, but I've never understood the argument that shareholder value is exclusively determined by profit. As I see it, the stock market consists of various firms saying "buy our stock, and we will try to achieve X with your investment", where X might be maximum ROI, but I don't understand why it has to be. If I want to found a company whi…

"Future philanthropic principles" are probably not for the CEO to decide. It sounds like something for the board. However I agree that a company should be able to define its mission and include things apart from maximum profit.
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