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There is no law that corporations have to act in their financial interests. They merely have to act in the interests of their owners (shareholders). Owners can
by ummonk 6y ago
There is no law that corporations have to act in their financial interests. They merely have to act in the interests of their owners (shareholders). Owners can choose to prioritize ethics over maximum financial return. This tends to be less likely (and harder to for owners to communicate) with publicly traded corporations, but studies do show e.g. that privately held large corporations are far more reluctant to do mass layoffs.
The real issue is Darwinian survival of the most profitable though - if doing the ethical thing isn't sufficiently rewarded with goodwill etc., then the least ethical corporations will expand the fastest, and outcompete the more ethical corporations. In the end, it is up to government, consumers, and workers to ensure that acting in an ethical way is not net harmful to a company's bottom line.