SEC views fun and social responsibility as risky business practices.
Are fun and social responsibility risky business practices? The U.S. Securities and Exchange Commission apparently thinks so, as AES Corp. discovered when it went public, last summer. AES, a five-time Inc. 500 company based in Arlington, Va., had sent the SEC a proposed prospectus that, among other things, discussed the company's four core values -- fun, fairness, integrity, and social responsibility. They were presented in the company description. The SEC said the information was in the wrong section; it belonged under "Risk Factors."
AES executives didn't argue. On the contrary, they made a point, in their road show, of emphasizing these "risks." "We think it's very important that potential investors understand the values are primary," says executive vice-president Robert Hemphill. "Maximizing shareholder wealth is not a goal of the company." Evidently, investors were not deterred. AES's stock offering was oversubscribed five and a half to one.