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Lecture June 16 applied ethics.docx

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Charles Repp

Lecture June 16Applied Ethics Legal ContextDodge v Ford Motor Co 1919oThe dodge brothers were major shareholders in FordoFord had this vision that every American has a ford caroThe investment he made in those plans were given to shareholdersoThe dodge brothers took it to court and they ended up winning so they were obligated to pay that money out oAt that time they decided that it was his own person vision but not for the company AP Smith Mfg v Barlow oThis guy donated to university Employees sued They lost Judge favoured in the case of giving money That an executive can make such a decision for a long term interest of survival or flourishing of the company Also since it was a good deedCanadaBCE Inc v 1976 DebentureholdersoBell CanadaoIn 2008 they were a target of a buy outoThey had three offers to choose on A group on shareholders sued the company so they showed that the buyout reduced the value of the shares It was not done in interest of the shareholders oIn 2008 supreme court favored in rule of Bell against the shareholders In these kind of change of control situations the managers are permitted to take interest of wide range of groups Directors have to look at the long term interest Also in this decision concept of corporate citizen Dont know what the legal preecedings would be after this Should corporations promote social good Morally vs Legally The law is relevant for this Shareholder TheoryThe onlydirect responsibility of a corporation is to maximize profits for ownersshareholders of the corporation
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