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Ok, you are nitpicking. The legal purpose is to advance the interests of shareholders. Sure, shareholders can give away all the money and earn zero returns ( p
by vasilipupkin 7y ago
Ok, you are nitpicking. The legal purpose is to advance the interests of shareholders. Sure, shareholders can give away all the money and earn zero returns ( presumably they would register a non profit if they wanted to do that ) but it would be illegal to do something that shareholders didn’t agree to. Did shareholders of the signatories agree to forego profits in order to make customers happy ? Of course not.
- vikramkr 7y agoI'm not nitpicking, and the legal purpose of a company is not to deliver shareholder returns. IIRC, most company incorporation specify the legal purpose of the corporation to be to do the business that the corporation is made to do. Here's the excerpt from my certificate of incorporation: "The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law. " And the same agreement vests in the officers the ability to do whatever is necessary to further that purpose. You obviously can't go against the results of a direct shareholder vote but officers have enormous leeway. If they decide to forgo profits in order to make customers happy, whether or not that is meant to drive long term growth, that is completely legal as long as there are no conflicts of interest.
- vasilipupkin 7y agoYou are nitpicking. The shareholders own the corporation. I concede that the purpose isn’t returns but the purpose is to further shareholders interests. The purpose isn’t in any way, shape or form to further employees interests.
- deleted 7y ago[deleted]