4 ms·

> You only have to remember that FAAMNGS are committed to their shareholders By committing only to shareholders, they miss out on other stakeholders: employees

> You only have to remember that FAAMNGS are committed to their shareholders By committing only to shareholders, they miss out on other stakeholders: employees, suppliers, customers, community. (Jonathan Haidt discusses at 18:50 onwards in this video: https://www.youtube.com/watch?v=iOu_8yoqZoQ https://www.youtube.com/watch?v=iOu_8yoqZoQ When the company emphasises only shareholders, they miss out on building cooperative relationships with the other stakeholders).

KingMachiavelli 7y ago
I say that meaning their fiduciary responsibility is to their shareholders. Their other stakeholders are by nature secondary. I'll have to check that video out but unless the shareholders themselves vote to prioritize employees and others above profit, the company and, more directly, upper management risks lawsuits and loosing their own lucrative positions.
- skybrian 7y ago
  Not a lawyer but it seems like in practice, the fiduciary responsibility thing seems like more of an ideology that some people buy into than a legal constraint? Management can choose to do all sorts of crazy things and argue that it's in the company's best interest. (But also read Matt Levine on how everything bad is also securities fraud.) The thing that really aligns employee incentives with shareholders is restricted stock and options. Employees directly benefit when the stock goes up, so of course it creates a culture where most people want it to go up and aren't happy when it goes down.
  - Gibbon1 7y ago
    It's not an ideology it's an excuse for board members and CEO to do what they want without being called on it. Namely loot the company. The guys in the mahogany suite say look the only people we are responsible to are the stockholders. Who most of them it turns out have very little coherent control. That's very convenient.

4 ms·

> You only have to remember that FAAMNGS are committed to their shareholders By committing only to shareholders, they miss out on other stakeholders: employees

by rgoulter 7y ago

KingMachiavelli 7y ago
I say that meaning their fiduciary responsibility is to their shareholders. Their other stakeholders are by nature secondary. I'll have to check that video out but unless the shareholders themselves vote to prioritize employees and others above profit, the company and, more directly, upper management risks lawsuits and loosing their own lucrative positions.
- skybrian 7y ago
  Not a lawyer but it seems like in practice, the fiduciary responsibility thing seems like more of an ideology that some people buy into than a legal constraint? Management can choose to do all sorts of crazy things and argue that it's in the company's best interest. (But also read Matt Levine on how everything bad is also securities fraud.) The thing that really aligns employee incentives with shareholders is restricted stock and options. Employees directly benefit when the stock goes up, so of course it creates a culture where most people want it to go up and aren't happy when it goes down.
  - Gibbon1 7y ago
    It's not an ideology it's an excuse for board members and CEO to do what they want without being called on it. Namely loot the company. The guys in the mahogany suite say look the only people we are responsible to are the stockholders. Who most of them it turns out have very little coherent control. That's very convenient.