Subject: Re: The merger: a user's perspective
From: "Stephen J. Turnbull" <>
Date: Wed, 17 Nov 1999 17:09:10 +0900 (JST)

>>>>> "shapj" == shapj  <> writes:

    >> a corporation can be chartered to do pretty much anything
    >> legal...

    shapj> Regrettably there are certain exceptions.  A for-profit
    shapj> corporation has a fiduciary obligation to its shareholders
    shapj> that dominates over all other issues -- including the
    shapj> charter.

OK, I take your point insofar as I understand it (IANAL).  I don't
understand what this means in context.

(1)  For-profit corporations regularly make charitable donations, they
even contract to make donations based on others' decisions (employee
contribution matching programs).  Evidently "fiduciary obligation"
leaves wide leeway for management to interpret "stockholder profit."

(2)  It seems to me that by putting it in the charter, even if it's not
legally binding (eg, against a hostile takeover), it should give you
substantially wider leeway to tie your hands without inciting a
stockholder revolt (and perhaps a hostile takeover).

For example, a for-profit company, with the approval of the
stockholders, could effectively bind much of its (written) intellectual
capital by the simple expedient of assigning copyrights and patents to
the Free Software Foundation.[1]  The stockholders could terminate the
practice, but I doubt they can get the software back.  Can they?

(3)  _We don't care about the stockholders' revolt._  Yes, we're sad
that an FSB went under (even if the company is very much alive).  But
the free software itself is still circulating in the community, and
the developers can quit.

I don't want to steal the stockholders' money, and force them to
subsidize free software forever; I just want a device to make sure
that if they sign up to produce free software, the software stays
free.  I think it's entirely reasonable that they should be able to
take their FSB lock stock and barrel and turn it into a purely
proprietary firm---the plant and equipment are theirs, of course.

I would hope that they give their free software developers "golden
parachutes"---developers are also stakeholders and have non-monetary
investments in the firm (aside from any stockholding they may have),
which would be devalued by the takeover---but it's up to the "FS
developers' union" to negotiate that contract.

[1]  I really wish there was more than one of these creatures for this 

University of Tsukuba                Tennodai 1-1-1 Tsukuba 305-8573 JAPAN
Institute of Policy and Planning Sciences       Tel/fax: +81 (298) 53-5091
What are those two straight lines for?  "Free software rules."