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This is the shortsightedness of chasing short term profits for the investors rather than a more sustainable approach of not handing over the reins to a less tha
by close04 6y ago
This is the shortsightedness of chasing short term profits for the investors rather than a more sustainable approach of not handing over the reins to a less than trustworthy partner.
I'm genuinely curious for how many companies did this short term bump in profits outweigh the long term loss by irretrievably handing over technology, business strategies, etc.
Edit for the comment below.
> legally obliged to maximise shareholder value
Fiduciary duties are not so explicitly described. A CEO must use care and be diligent when making decisions on behalf of the company and shareholders. Make choices in good faith with true belief that each choice is made with the best interests of the corporation in mind.
Hence the best interests of the corporation must be weighed between short term and long term. A CEO could argue either way that they took the decision in good faith. This is where my curiosity came from, how many of these decisions turned out to be financially successful in hindsight?
- secondcoming 6y agoAren't CEO's kind of legally obliged to maximise shareholder value, so they have to do the deal with the devil?
- tbihl 6y agoNo. They are to act in the best interest of the corporation/shareholders, which with increasing clarity means not getting in bed with Chinese organizations (assuming your foresight extends beyond the end of your nose.)
- secondcoming 6y agohindsight is great!
- jacquesm 6y agoWhy do we see this thing over-and-over-and-over again? It isn't true. It never was. Stop repeating it.
- ta17711771 6y agoComforting to some.
- rbecker 6y agoA common misconception. “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”: https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...