3 ms·

It's an opinion piece. Citation implies academic paper. Not quite the same.

• yourapostasy 4y ago
  US-based companies and their directors do NOT have a legal, fiscal agent duty to always increase profit / share price. There is well-established case law around this. This Harvard Law précis of an academic book gives guidance on where to find the dry legal work that surrounds this legal position [1]. You are welcome to counter that Part I with your own legal constructs, but there are sound legal reasons it is structured this way. There are dissenting papers [2] mostly revolving upon Dodge v. Ford Motor Company, but there are many intractable problems when you assert such primacy. Over what duration? As compared to which company? Accounting for intangibles? Valuation of non-monetary factors? Accounting for market gyrations? Primacy by what percentage? That dissenting paper glosses over much of the nuance of Stout's thesis [3], as well as case law ever since that point to the problematic practicalities of courts deciding how companies should carry out the distribution of the benefits of organizing stakeholders together. So many people who should know better keep repeating this canard. Shareholders can certainly mount a challenge through corporate governance channels for example, but they fare poorly when mounting a challenge through the courts. [1] https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-value-myth/ https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v... [2] https://clsbluesky.law.columbia.edu/2022/04/26/why-we-should-keep-teaching-dodge-v-ford-motor-co/ https://clsbluesky.law.columbia.edu/2022/04/26/why-we-should... [3] https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=1826&context=facpub https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?arti...