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> ...which is legally required to put shareholders profits as a higher priority than everything else. Please retire this egregiously broken misconstrual of fid
by rosser 8y ago
> ...which is legally required to put shareholders profits as a higher priority than everything else.
Please retire this egregiously broken misconstrual of fiduciary duty. I promise you, this is not the law, and you sound a fool for repeating it.
- xena 8y agoThen what is?
- deleted 8y ago[deleted]
- tlholaday 8y agoThe law obliges management of a publicly traded company to report fairly to its shareholders its assets, liabilities, revenues, costs, and certain other items such as the compensation of the five most highly compensated officers. If a shareholder believes that management is not maximizing profits, the shareholder is at liberty to take his or her money and go elsewhere, by selling his or her shares.
- rosser 8y agoIf that shareholder elects instead to sue, they will almost certainly lose, absent specific evidence of bad faith or of breaches of the duties of care or loyalty, for example. The "business judgement rule" [0] compels courts to defer to the judgement of the executives of a business, on the basis that they have a bona fide interest in that business and its activities, and understand them better than either the court or J. Random Shareholder ever could. "The business judgment rule is very difficult to overcome and courts will not interfere with directors unless it is clear that they are guilty of fraud or misappropriation of the corporate funds, etc." [1] [0] https://en.wikipedia.org/wiki/Business_judgment_rule https://en.wikipedia.org/wiki/Business_judgment_rule [1] ibid.
- vonmoltke 8y agohttps://www.nolo.com/legal-encyclopedia/fiduciary-responsibility-corporations.html https://www.nolo.com/legal-encyclopedia/fiduciary-responsibi...
- beams_of_light 8y agoMore specificity is probably called for, as I have been under the same impression for quite a while. Directors of companies are now asked to consider stakeholder value rather than shareholder value when making decisions. A stakeholder can be a person whose environment is impacted by the decision, employees who may or may not be shareholders, customers, etc.