One thing that constantly surprises me is how many people believe that maximizing shareholder value is some sort of legal or moral obligation, not an ideological convenience made up out of whole cloth by an economist in the 70s. What's elided in this article is that Jack Welch called it “the dumbest idea in the world.”
@stilescrisis@mhoye@anildash And in most cases, laughed out of court, but they love having useful idiots repeating this persistent myth to further their de facto power.
@dalias@mhoye@anildash I'm not saying they are easy cases to win or not. I'm saying there is in fact a legal framework here, which contradicts the OP's post.
"While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so."
@mhoye@stilescrisis@dalias I’ve served on the board, or advised, multi-billion-dollar companies and fiduciary duty does not solely require maximizing shareholder value. I genuinely think a lot of people make this mistake because they think “fiduciary” just means “money”, and “money” just means “short-term shareholder returns”. None of that is true.
@anildash@mhoye@dalias I totally agree that "fiduciary duty" doesn't mean squeezing out every last nickel at every opportunity. It just means you're a proxy for the shareholders, and you are expected to act in their best interest. That isn't the same thing as extracting the maximum amount of cash from every possible buyer.
@stilescrisis@mhoye@dalias responsibility to shareholders is certainly a responsibility, but it's not the only one, and directors have responsibility to workers, customers, communities, and many other constituencies to balance. It's only the intellectual laziness and unrepentant cronyism of most publicly-traded companies' boards that reduces them to shareholder maximization puppets who never hold CEOs accountable.
@mhoye@stilescrisis@dalias The share holders themselves are interested in more than just short term money. Subscriptions are popular because shareholders care more about recurring long term profit than a short term sale. Share holders also tend to care about the image of the company.
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