Intel shareholders can now vote to ensure Intel takes a stand against China, if they choose. But it seems those individuals do not want that. So Intel is doing what it is supposed to do -- operate in accordance with wishes of the shareholders.
Counterpoint: the human beings that run Intel are not "supposed to" do everything possible to make their shareholder more money, regardless of the cost. I accept that they're going to do that, but there's nothing forcing them to, there's just a general cultural acceptance of greed.
No one is saying that. They do what the shareholders want because that's who they legally work for. Shareholders can say screw China, take a stand and they will. They can't unilaterally say screw the shareholders we're going in this direction.
A company is a group of people coming together for a purpose. Management can't destory the group in pursuit of their own values. A ship's captain can't risk the ship because of their own values.
They haven't even asked what the shareholders want. They don't think they need to, because they believe that everyone will naturally share their belief that money is their highest priority.
Management doesn't ask shareholders for approval on every decision.
They have a duty to act in the best interest of the shareholder. Generally that means not having reduced revenue. This is what most people accept. If shareholders want them to do something different they can let them know.
> Generally that means not having reduced revenue.
I think this is the fundamental disagreement we have, and it's probably too big of a conversation for a comment thread. In my philosophy of determining "best interest", revenue is an important consideration, but not the only one and not the most important one. There is certainly no legal duty to increase revenue or stock price or anything like that.
Shareholders haven't resolved that Intel must or must not use slave labour.
And a court isn't going to second-guess the management if they judge the cost savings of using slave labour don't outweigh the potential for reputational damage.
I would argue that 'shareholders' aren't able to influence these decisions at multi-national mega corporations, because many don't even know they are shareholders. Think about Joe Blow from the US. He has a managed 401k or some such investment. He has no idea the 'low-risk' fund offered through Edward Jones invests in Intel or Google or whoever. He has no idea he plays a part in this.
I would argue that 'shareholders' aren't able to influence these decisions at multi-national mega corporations
There's such a thing as activist investors, and they seem to be gaining influence lately. From what I read in the newspaper, they're behind a lot of the changes that are starting to happen at certain multi-national oil companies.
A flaw in the system to be sure. As a former INTC owner, I dumped my stake a while ago.
I think there should be far more shareholder involvement in general. We are far too acquiescent as a group.
If you polled every direct and indirect INTC holder (you may be one, unknowingly) about slavery and concentration camps, you’d walk away with a near 100% mandate for taking all measures against it.
> Intel shareholders can now vote to ensure Intel takes a stand against China, if they choose. But it seems those individuals do not want that.
Too early to conclude this. These tensions present not only a reputational risk for Intel, but financial ones as well, particularly if tensions escalate. Managers might not care, but there is precedence for shareholders taking a longer view [1].
I think the shareholders SHOULD take a stand, at Intel, Disney and other companies. The point I was making was that the power is in their hands, not management.
Intel is chopped up into tens of millions of tiny slices, and everyone with any form of retirement savings has a handful through some sort of fund.
Generally these people barely know they're shareholders, they receive none of the paperwork needed to vote at the AGM, they have a slice several orders of magnitude too small to exert any influence, and they have no way of identifying or contacting other shareholders to take any sort of coordinated action.
Anyone who expects X to be done by shareholders is going to be disappointed.
Which again goes to my point. People who care about Intel taking a stand against China should actually buy shares from the existing investors and make them.
If no one wants to do that then what is all these kvetch about "capitalism" and "greed" corrupting companies and our values when it is the people who do not care. Certainly not enough to pay up for the shares.
in my case I was waiting for disgruntled shareholders to sell because an aggregate stance was not taken by management or other shareholders, and then when sold it goes to people more or less apathetic.
in your case you want people to buy the shares at any price but likely a premium, in order to exercise a goal, which I frankly think is absurd.
so guess the market has priced everything in well enough, as an aggregate opinion on its own.
If the American consumers of Intel chips -- the people and government actors -- are unhappy with Intel's stance then they can also not buy their chips. This is basically what the Chinese are doing (without owning shares). Now granted the Chinese people have little say in it but the government is ostencibly acting on their behalf. Even if China was a democractic country and the CCP could not ban Intel outright then the government or the people could say that they would not buy Intel chips.
So if Americans did the same to uphold their own belifes then Intel would suffer here and that would reduce the stock price, which would make it easier for people who want to take them to take the progressive position to buy the stock and force them to reverse their position.
The key take away is that there is no scenario in which both sides actuall care about the issue and Intel stock doesn't drop.
Since it doesn't it means that Americans do not care about it as much as the Chinese, or do not know how to express their displeasure :)
I would fundamentally disagree with the idea that you don't "actually care" about an issue if you're not boycotting people over it. Why can't I genuinely care about Intel doing the right thing here without building a blacklist of Intel-backed AWS instance types I won't use?
I meant it in the sense it is used in economics not in the colloquial sense.
If A cares enough about an issue and is willing to deal with the consequences and B does not then A wins and B loses.
Everyons is willing to commit something for a cause they care about. It could be as little as taking time to convince others by writing an article or a tweet, or as much as being able to commit violence for it and deal with the consequences.
One aspect of life, from negotiations to geopolitics to convince your opponent that A) you would be willing to pay a higher price than they are for your position B) you CAN pay that price.
In case of Intel v China, CCP has something to lose by banning Intel but they've demonstrated or at least convinced them and most other companies that they're willing to pay that price and CAN pay it (by the virtue of being the CCP and having absolute authority). A nation with less resources may not be able to convince a mega corp in order to get concessions.
So in this case if Americans care more about this issue they have to convince the Chinese that they're willing AND able to pay a higher price than they are.
Collective action problems are not solved through capitalism. Unfortunately, Western countries are gripped by misguided reactive individualism right now and governments are very hamstrung.
