(Dodge v. Ford) Directors owe fiduciary duty to shareholders to maximize profits ( can ignore society, employees, officers, but not sh.holders) o Board not required to change working strategy to potentially earn more profit o Can be other important interests, but if conflict, s/holder profit maximization must prevail o But See ALI principles of corporate governance Objective should be to enhance corporate profit and shareholder gain. May devote a reasonable amount of resources to charity (even if corporate profit not enhanced) NOTE: Public Benefit Corporation S362 DGC: NY and CAL also has 90% of shareholders must approve. Other 10% get fmv. Name must contain PBC Balances stockholders pecuniary interests, the best interests of those materially affected by the corps conduct (employees), and the public benefit Operate in sustainable manner A. Social Responsibility (CTS usually refer to corp through BJ Rule) NEW JERSEY A corporation may make reasonable charitable contributions that benefit shareholders, provided its not a pet project. Donations limited to 1% of capital and surplus by statute. A.P. Smith v. Barlow A donation made to Princeton was reasonable and helped strengthen the companys relationship with the University which would hopefully lead to top grads joining company DELAWARE Making contributions is a specific power of the corporation, but is subject to corporate benefit (ie. some profit maximizing rationale). As long as serving corporate benefit the donation may serve a laundry list of purposes
scientific, educational, emergency relief, etc. (tolerant, can be
tenuos). NEW YORK Contributions are within corporations authority irrespective of corp benefit a. Factors to consider (from A.P. Smith v. Barlow) Was donation: 1. Discriminately (opposed to indiscriminately) made 2. Made to pet charity of directors 3. Modest in amount and well w/in statutory limitations (if applicable) 4. Voluntarily made in the reasonable belief that it would aid the public welfare and advance the interest of the corp in the community (ex. of benefits good will; tax benefits) Pennsylvania: Not just charitable, but can be communitarian because directors not liable under consumer live (no fiduciary duty). Has to benefit something, not just sholders