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This is often repeated, in part because of some dubious behavior between Ford and the Dodge brothers, but not precisely true. "modern corporate law does not re
by axaxs 7y ago
This is often repeated, in part because of some dubious behavior between Ford and the Dodge brothers, but not precisely true.
"modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so."
See: https://www.lawschool.cornell.edu/academics/clarke_business_law_institute/corporations-and-society/Common-Misunderstandings-About-Corporations.cfm https://www.lawschool.cornell.edu/academics/clarke_business_...
and the linked Hobby Lobby case opinion.
- blueboo 7y agoHair-splitting. The obligation is enshrined in law. Shareholders invoke it. The consequences are a change in leadership, not jail. To quote the linked opinion: > In nearly all legal jurisdictions, disinterested and informed directors have the discretion to act in what they believe to be the interest of the business corporate entity, even if this differs from maximizing profits for present shareholders. This is a perfect example. Western companies are antagonizing their US market in favor of developing a future Chinese one.
- axaxs 7y agoIt's not, though. To counter your original point, a corporation could decide to not appease China, even if it means a loss in profits. They could justify it any number of ways, saying the US market may be more valuable to their company, or that trade tensions with China make things unstable. There is no legal basis forcing companies to appease China.
- jjeaff 7y agoExactly. And even if there was a legal obligation to make money at all costs, it could easily be argued that kowtowing to China is a short term strategy with severe long term consequences. You might make more money now, but that will be negated when they steal your IP and the government siezes your property.