[Discuss] EOMA68 Libre Hardware Standard and Libre Software project, currently crowd-funding (deadline expires 26th aug 2016)

[Chris Church]

On Thu, Aug 25, 2016 at 1:28 AM, Matt Maier <blueback09 at gmail.com> wrote:

> I feel you. I'm grappling with how to incorporate my own startup
> specifically because I think a fundamental flaw in our current system is
> that the people in charge of corporations are only allowed to consider
> profit in their decisions. They literally, legally, due to their fiduciary
> responsibility, cannot base their decisions on anything other than
> maximizing the dollar value of the corporation.
>
>
This meme is patently false, and should be avoided.  There are many reasons
to explore various corporation, and business entity types, but they should
be based on their merits, not an incorrect interpretation of what
'fiduciary' means.  And any corporation type which excludes a fiduciary
responsibility for directors or owners should be avoided like the plague
since they would signal to any other members that they are ill-governed,
and one may expect inside-, self-, or double-dealing from the leadership
Fiduciary responsibility does not mean "basing your decisions on anything
other than maximizing the dollar value," but instead are five guiding
responsibilities which ensure that directors/leaders/owners will provide
due care in their leadership, basing their decisions on sound judgement of
the merits and not put their own financial or business interests above
those of the other members/shareholders/owners. [1]  (For example, saying
"I'll give myself a dividend and no one else," is against their fiduciary
duty, but saying, "Selling weapons, while profitable, is against our
corporate ethics guidelines," is not.)

The supreme court of the US has several times declared that there is no
such requirement to pursue profit at the cost of all else, most recently in
the Hobby Lobby case [2].  If there were such a requirement, CVS wouldn't
have been legally able to stop selling cigarettes, or restaurants would be
forced to sell alcohol even if they didn't want to.  This line of thinking
is dangerous and it masks away individual decisions under some vague
concept of "oh, business has to be this way," rather than understanding
that a group of people may legally, and under the same framework, make an
entirely different set of decisions.

For further reading on what constitutes a breach of fiduciary duties, this
is a bit verbose, but useful read:
http://apps.americanbar.org/abastore/products/books/abstracts/5310344_chap1_abs.pdf

[1]
http://www.nolo.com/legal-encyclopedia/fiduciary-responsibility-corporations.html
[2] http://caselaw.findlaw.com/us-supreme-court/13-354.html "While it is
certainly true that a central objective of for-profit corporations is to
make money, modern corporate law does not require for-profit corporations
to pursue profit at the expense of everything else, and many do not do so.
For-profit corporations, with ownership approval, support a wide variety of
charitable causes, and it is not at all uncommon for such corporations to
further humanitarian and other altruistic objectives. Many examples come
readily to mind. So long as its owners agree, a for-profit corporation may
take costly pollution-control and energy-conservation measures that go
beyond what the law requires."
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.oshwa.org/pipermail/discuss/attachments/20160825/161db4af/attachment.html>