Wikipedia:Reference desk/Archives/Humanities/2011 July 22

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July 22

Duty to try to make a profit

I thought that in the UK, directors etc of plcs had a legal duty of having making a profit as their overriding goal. So how come News International keeps The Times running at a loss? Wouldnt this be unlawful?

I heard somewhere that Rupert Murdoch only owns 7% of News International. So how come he is in control of it, and can run it as a family business with his children being given top jobs? 92.24.138.86 (talk) 00:03, 22 July 2011 (UTC)

The owners of a corporation are its shareholders. The directors of a corporation are employees of those owners. The shareholders in general are going to be interested in profitmaking, but AFAIK there is no legal requirement that the shareholders cannot decide on other goals. In particular, it can be beneficial for a company to have some divisions which, on paper, lose money if the entire company makes more money as a result. If The Times individually runs at a loss (and I don't confirm that it is true what you say, I only take it as a "what if"), it may still provide value to the company by raising the overall prestige of the company, or in other ways. Lets simplify it by an analogy: If I run a company, and look at the books, and see that the Purchasing department is always in the red, it doesn't make sense for me to just divest my company of all Purchasing! The purpose of purchasing is to spend money, not make it. The money it spends hopefull provides me with value in other ways. So think of the Times as a division which may lose cash, but still provide value in other ways. As far as the second part of the question: The CEO of a company needn't be the majority shareholder. He just needs to be someone who is able to command the confidence of enough of the shareholders to keep the job. --Jayron32 00:17, 22 July 2011 (UTC)

News_Corporation#Shareholders indicated the Murdoch family owns more than 40% of shares; and I recall that figure from recent press coverage. They may also have a larger percentage of voting share. Per Jayron, companies may elect to run loss making venture if their board and shareholders and content to do so. Currently t appears that they are. Companies certainly are not constrained to maximise profits - that's a popular myth which doesn't bear a moment's scrutiny: who exactly - apart from the board and shareholders - is in a position to balance current versus future profits: taking a snapshot or viewing a particular period in the life of an asset (or liability) such as the Times is merely to posit an arbitrary timeframe for analysis. The board or shareholders may be working to an entirely timeframe. Shareholders have mechanisms open to them to eject a board with which they are not satisfied. That, rather than mythical legal duty, is the means by which shareholders keep their company doing what they want it to do. --Tagishsimon (talk) 00:40, 22 July 2011 (UTC)

According to today's The Observer the family own 40% of the shares with voting rights but only 12% of the overall equity shares. Such dual types of shares are increasingly discouraged by stock exchanges - I don't think they are permitted for new quotation launches in London, but they still exist. Johnbod (talk) 14:53, 24 July 2011 (UTC)

The duty referred to is called Fiduciary duty and is indeed a legal duty but as correctly noted above, is not to be interpreted crudely. Sam Blacketer (talk) 08:38, 22 July 2011 (UTC)

Indeed - the best long term interests of the company may well be different to the short term effect on liquidity. Chief Executives are paid their money to perform that kind of balancing act. The original poster may however have been somewhat thinking of the legal proscription on trading while insolvent, which is considered a form of fraud and rather frowned on by law enforcement agencies. Elen of the Roads (talk) 10:41, 22 July 2011 (UTC)

Directors have a legal duty to avoid bankruptcy (and leaving piles of debt behind) normally, that's connected to making a profit someday, but not always. — Preceding unsigned comment added by 88.8.79.148 (talk) 12:38, 22 July 2011 (UTC)

What is your source for the statement that directors have a legal duty to avoid bankruptcy? One can easily imagine a business plan where bankruptcy within three years was likely — let's say, roughly a 60% probability — but the other 40% of the time the company's capital would increase tenfold. As long as this business plan was disclosed to the shareholders, surely it would be legal in most jurisdictions for the directors to adopt it. Mathew5000 (talk) 18:29, 22 July 2011 (UTC)

That makes no sense. Bankruptcy is a legal process, not necessarily a financial one. The first step is often bankruptcy protection - which can often lead to higher profits when complete than the company made before going into the bankruptcy process. If it was a "legal duty", the courts would be full of stockholders suing every director of every company that has ever filed for bankruptcy protection. -- kainaw™ 18:58, 22 July 2011 (UTC)

Indeed, there is a thing called bankruptcy fraud, which mainly consist in faking documents, hiding assets, inventing bills to bleed the company and many more things to cheat creditors and investors. Directors have a fiduciary duty towards these groups of people, which do not make them criminal if they do not generate profits or if the company goes bankrupt. It's about how it happens nor if it happens. Quest09 (talk) 20:43, 22 July 2011 (UTC)

What is a "civil magistrate" in Virginia?

In Virginia, what is a "civil magistrate"? How does someone become a civil magistrate? --173.49.11.21 (talk) 08:39, 22 July 2011 (UTC)

Is Magistrate#United_States any use? 130.88.134.214 (talk) 10:11, 22 July 2011 (UTC)

As far as I can tell, Virginia does not have "civil magistrates" and "criminal magistrates" but just "magistrates" (who have both civil and criminal jurisdiction). In what context did you see the phrase "civil magistrate"? In 1974, Virginia replaced the office of justice of the peace with the office of magistrate. Since July 2008, magistrates are appointed by the Executive Secretary of the Supreme Court of Virginia in consultation with the chief judges of the circuit courts having jurisdiction within the region that the magistrate is appointed to serve. Eligibility requirements include a bachelor's degree, US citizenship, Virginia residency, and lack of felony conviction. Source: Magistrate Manual. See also map showing regions linking to lists of the magistrates in each magisterial district and generally Magistrate System. Mathew5000 (talk) 15:59, 22 July 2011 (UTC)

(I am the OP.) Friends of mine got married in a civil wedding when they were living in Virginia. The officiant's title was "civil magistrate". That was some years ago. — Preceding unsigned comment added by 173.49.13.190 (talk) 05:15, 23 July 2011 (UTC)

Was it before 1974? Mathew5000 (talk) 17:18, 23 July 2011 (UTC)

In any event, the term "civil magistrate" for someone empowered to perform a civil marriage ceremony would not seem to be official. According to Virginia's Office of Vital Records, "the court in each city and county has appointed persons who are eligible to perform civil marriage ceremonies." So if you want to become such an individual, I suppose you should contact your local court. If you want to search on Google there are a variety of terms you could use: "marriage commissioner", "wedding officiate", "civil officiant", "civil marriage celebrant", and so forth. Try Googling some of those, or variations, along with the keyword Virginia or the name of your county, for example marriage celebrant fairfax county or marriage officiate virginia. Mathew5000 (talk) 17:38, 23 July 2011 (UTC)

Simple. You take lessons from Miss Manners. Clarityfiend (talk) 20:59, 22 July 2011 (UTC)

End of don't ask, don't tell

Does it mean the army can ask recruits again whether they are homosexual? Quest09 (talk) 23:06, 22 July 2011 (UTC)

irrelevant to answering the OP's question
The following discussion has been closed. Please do not modify it.
Which army? HiLo48 (talk) 23:11, 22 July 2011 (UTC) Don't be tiresome. The reference to don't ask, don't tell nails it down perfectly well, and if you've been living under a rock and haven't heard of it, a simple search would clear it up. --Trovatore (talk) 23:12, 22 July 2011 (UTC) I believe that getting more people to accept that this is a GLOBAL encyclopaedia is worth making you tired. Thank you for the link. HiLo48 (talk) 02:55, 23 July 2011 (UTC) I believe that you have a bug up your butt about Americans. You really need to just drop it. Sometimes you get downright uncivil about it. This was a minor case in itself, but the pattern of behavior is unacceptable. --Trovatore (talk) 03:10, 23 July 2011 (UTC) I believe that your paranoia and appalling manners are showing. Maybe it's behaviour and attitudes like yours that keeps me on my toes. Why do some people from the most powerful nation on earth have to act like they're under some sort of threat all the time? HiLo48 (talk) 03:18, 23 July 2011 (UTC) You're one to talk about manners!! --Trovatore (talk) 03:25, 23 July 2011 (UTC) I'm sorry, but I'm not going to stop trying to get all editors thinking more globally. Peace for now. HiLo48 (talk) 03:28, 23 July 2011 (UTC) I don't buy that that's your real motivation. You don't seem to notice, for example, when UK editors do it, and they're almost equally if not equally guilty. Aussies, I'll concede, somewhat less. Your entirely unprovoked and unacceptable musing that you "suspected" the question about half-black celebrities was "very American" doesn't fit into your claimed paradigm at all. --Trovatore (talk) 03:31, 23 July 2011 (UTC) It's a valid point. The world does extend beyond the US coast, and the question shouldn't need someone to go and do some work themselves to work out what it's on about. The US military might like to think it's the only game in town, and from experience it generally does, but there are others out there... ALR (talk) 23:43, 22 July 2011 (UTC) But seriously, is there any other country whose military has/had a policy generally known as "don't ask, don't tell"? -- Jack of Oz [your turn] 00:02, 23 July 2011 (UTC) I've worked with a couple who still have homosexuality regulations, but tend not to actually apply them. Colloquially DADT. ALR (talk) 08:36, 23 July 2011 (UTC) As Trovatore originally put it: "don't be tiresome." --Mr.98 (talk) 19:37, 23 July 2011 (UTC) Merely pointing out that the assumption that the US is the only country to have the policy is inaccurate. But since nobody else actually matters clearly it's not an issue. ALR (talk) 20:18, 23 July 2011 (UTC) He specifically mentioned a noteworthy US law by name. Are there really non-us armies bound by that law? If so you should probably update that article, because that sounds fascinatingly unusual and I look forward to reading about it. APL (talk) 01:58, 24 July 2011 (UTC)

It means that they can ask, but aren't allowed to take any action on the response.

The more practical issue is that perfectly competent servicemen and women aren't now going to be discharged on the basis of their sexuality being inadvertently exposed.

ALR (talk) 23:38, 22 July 2011 (UTC)

So why would they ask in the first place? The end of the policy acknowledges that the sexual orientation of individuals is and always has been irrelevant to their capacity to be members of the military. -- Jack of Oz ^{[your turn]} 23:58, 22 July 2011 (UTC)

I don't think anyone has really come to grips with the question. Unless ALR actually knows something; his/her response struck me as a guess.

A lot of people seem to have forgotten that DADT was a fairly major step in the direction of tolerance. Clinton had promised to end the ban on homosexuals in the military altogether, but ran into too much opposition on that point and backed down, accepting DADT as a compromise. Had it literally been repealed altogether, presumably that would mean that the military could go back to sending gay servicemen to Leavenworth. Not sure how much of that they actually did, but I am fairly sure it was a criminal offense before DADT.

So what is the new law, actually? I don't really know. It may or may not forbid recruiters to ask that question. --Trovatore (talk) 00:41, 23 July 2011 (UTC)

I've read the prior legislation, and the DADT guidance as it applied to an individual under my command at the time.

While I haven't read any of the supporting material for the removal of the caveat I have been involved in discussion about it.

ALR (talk) 08:34, 23 July 2011 (UTC)

Ah, thanks, that helps. You didn't mention any of that in your response (and your user page doesn't mention you being in the military) so it sounded like a guess to me. --Trovatore (talk) 08:37, 23 July 2011 (UTC)

Exactly, there is now no need to ask the question. Prior to DADT there was an explicit prohibition with an explicit question, when DADT cam in the prohibition remained in place but there was no explicit statement from the individual. The result was that if information came to light that an individual was breaching the prohibition they were discharged.

My understanding is that the prohibition is now to be removed, so there is no mechanism for discharge therefore no purpose in asking the question.

From a UK perspective, since we altered our legislation 11/ 12 years ago, it means that asking the question itself is now prohibited as it has no value in any recruitment or HR context.

ALR (talk) 08:34, 23 July 2011 (UTC)

I would just note that there are medical reasons to ask the question, at times (I have been asked in relation to assessing various STD risk factors), and in the military, there is no doctor-patient confidentiality. (This latter point was one of the reasons DADT was so awful.) --Mr.98 (talk) 01:38, 25 July 2011 (UTC)

One consequence of this new policy is that if the draft is revived, gays will no longer be able to use the fact of their being gay to avoid the draft, as they could during the Vietnam era - in which it was at least jokingly (as in the song Draft Dodger Rag) claimed that straight men might pretend to be gay for that reason. ←Baseball Bugs ^{What's up, Doc?} carrots→ 08:32, 23 July 2011 (UTC)