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> The directors have a legal responsibility to the company and to boost the share price, not for the betterment of humanity. That's an often-repeated maxim, bu
by jka 4y ago
> The directors have a legal responsibility to the company and to boost the share price, not for the betterment of humanity.
That's an often-repeated maxim, but it's not universally agreed to be true.
Quoting https://corpgov.law.harvard.edu/2019/08/24/stakeholder-governance-and-the-fiduciary-duties-of-directors/ https://corpgov.law.harvard.edu/2019/08/24/stakeholder-gover... for example:
"The fiduciary duty of the board is to promote the value of the corporation. In fulfilling that duty, directors must exercise their business judgment in considering and reconciling the interests of various stakeholders—including shareholders, employees, customers, suppliers, the environment and communities—and the attendant risks and opportunities for the corporation.
Indeed, the board’s ability to consider other stakeholder interests is not only uncontroversial—it is a matter of basic common sense and a fundamental component of both risk management and strategic planning."
- hansword 4y agoThe big point in what you quote is "and the attendant risks and opportunities for the corporation." I read this Harvard text to basically say: "Don't cheat if the cheating will be coming to bite you later. Be generous if you expect additional profits to come from this generosity."
- jka 4y agoFair point, yep. Generalizing your statement slightly: > Be generous if you expect additional <reward> to come from this generosity. Options for reward could include (without being limited to): "profit", "platform adoption", "trust".. and those rewards often affect each other over time.