The Stakeholders Of FREEPORT INDONESIA Stockholders and The US Government

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The Stakeholders OfFREEPORT INDONESIA-
Stockholders and The US Government

• Astrid
• Jessica
• Mari
• Mirza

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Stockholders of Freeport Indonesia

• One who owns shares of stock in a corporation or
  mutual fund. For corporations, along with the
  ownership comes a right to declared dividends and
  the right to vote on certain company matters,
  including the board of directors.
• ( www.investorwords.com/4735/stockholder.html )

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1. Description
Public
88.6
PT-Indocopper Investima
49
FCX
11.4
RTZ
9.36
81.28
Government
Freeport Indonesia
RTM Smelter
9.36
20
New Smelter Mitsubishi Flour-Daniels
Contract of Work
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2. The Relative Strength of the Stockholders on
Freeports Management

• 4
• Justification
• They are the owners of the company
• Possibility to fire/replace management

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3. The Relative Strength of Freeports Management
on Stockholders

• 2
• Justification
• They have the power to make decisions,
  nevertheless, they work to satisfy the
  stockholders
• Ultimately, their overall power are relatively
  low

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4. The Nature of the Relationship Between the
Stockholders and Freeports Management

• 3
• Justification
• Conflicts of interest? Possibility of
  principal-agent problems as objectives might
  differ
• ? Management objectives keep their jobs and
  personal benefits
• ? Stockholder objectives maximize firm value
• If incentives are imposed to converge the
  objectives, the relationship might be of a
  somewhat more cooperative nature

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5. The Two Most Important Issues

• How can Freeport convince their stockholders that
  more resources should be spent on environmental
  sustainability?
• How can Freeport assure that the objective of
  management and stockholders regarding
  environmental issues are identical?

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6. Strategy Recommendations

• Freeport should focus on communicating the
  following
• Cost-benefit of being environmentally concerned
• Long-term profitability

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The US Government

• A government is a body that has the authority to
  make and the power to enforce laws within a
  civil, corporate, religious, academic, or other
  organization or group. However, these are not
  physical laws. In its broadest sense, "to govern"
  means to administer or supervise, whether over a
  state, a set group of people, or a collection of
  assets.
• In this context, specifically the United States
  of America
• Source http//en.wikipedia.org/wiki/Government

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1. Description
Freeport Indonesia
90
U.S. Government
25
90
OPIC
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2. The Relative Strength of the US Government on
Freeports Management

• 3
• Justification
• The U.S. Government has the authority to oversee
  any or all of Freeports operations directly,
  through regulations, laws or taxes.
• The U.S. Government can also indirectly affect
  Freeports financing options via OPIC

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3. The Relative Strength of Freeports Management
on the US Government

• 1
• Justification
• Freeport has the option to not obey the laws and
  regulations and suffer any consequences
• Freeport also has lobbyists at Washington which
  are trying to influence legislators for
  regulations in Freeports favor.

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4. The Nature of the Relationship Between the US
Government and Freeports Management

• 4
• Justification
• It is in the US Governments favor if Freeport is
  profitable, thereby realizing more revenue via
  taxation.
• Freeport needs the government loan via OPIC to
  help finance long-term operations

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5. The Two Most Important Issues

• How can the US Government best preserve
  Freeports profitability and ensure long-term
  sustainability?
• How can Freeport communicate effectively with
  legislators the situation in Indonesia and
  maintain financing?

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6. Strategy Recommendations

• Freeport should open the mine to U.S. Government
• inspections, and
• Freeport should cooperate with any recommendations