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No I meant it in a broader sense. Whenever I ask someone why companies are so hyperfocused on growth every single quarter they usually cite fiduciary duty or so
by newswasboring 5y ago
No I meant it in a broader sense. Whenever I ask someone why companies are so hyperfocused on growth every single quarter they usually cite fiduciary duty or something. I am not sure if it's a law or a company by law
- vrc 5y agoCompanies are hyper focused on growth because growth is priced in to their valuation, either by VCs or the public market. Nobody wants to plunk their money into something that won’t give them a return, and non-growth businesses have to pay investors in things like dividends or royalties to keep their market value. In terms of fiduciary responsibility, here’s something I found: https://www.upcounsel.com/board-of-directors-fiduciary-duty https://www.upcounsel.com/board-of-directors-fiduciary-duty I believe you can be sued for breach of this, and can certainly lose your board seat. I would guess it will devalue the company if a breach were to occur.
- ergocoder 5y agoIt is probably a guideline where they have to keep delivering more values to the shareholders. I think it is just a vague guideline because in this instance the board didn't even try to negotiate for a few billions more.