4 ms·
"their legal fiduciary duty is to maximize profits" actually is not true. Although it's of course a very common motive.
by D-Coder 10y ago
"their legal fiduciary duty is to maximize profits" actually is not true. Although it's of course a very common motive.
- curried_haskell 10y agoI would tone the statement down, but it's still true that the number one purpose of a for-profit business is to generate profit. All other activity, in general, is secondary to profit. It's like saying a human doesn't need to eat. Sure, sometimes healthy people go without food to achieve a goal, and a few rare people sacrifice themselves for the common good. But these people are exceptions to the rule. It might more profitable to find a cure, but often business is blinded by short term rather than the long game.
- tome 10y agoI don't think that's true at all. In the UK at least I believe there is some expectation that a limited company will return profits to shareholders, but besides that the shareholders and directors can set the priorities of the company to be anything they want. If you know of anything to the contrary I would be very interested to hear it!
- karmajunkie 10y agoI'm not sure what there is to tone down. The statement is patently untrue.[1] [1] http://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits http://www.nytimes.com/roomfordebate/2015/04/16/what-are-cor...
- 50CNT 10y agoYou could argue just as well that the number two purpose of an organization is to generate profit. Profit is a necessity to achieve your primary goals. People need to eat, but you'd have to be a pretty uninspired person if your number one purpose is meeting your caloric expenditures.