3 ms·

> The directors have a legal responsibility [...] to boost the share price What?

• woodruffw 4y ago
  I think the GP is referring to shareholders’ right to sue if they believe that a company’s executive/leadership is operating against the interest of the company (and therefore the shareholders.) But that’s a pretty high standard, one that isn’t coextensive with boosting the share price by any means necessary.
• uberman 4y ago
  It might be technically true that some deviation from maximizing investor return is not strictly against the law However, there are several legal opinions that complicate this interpretation. I recommend you read the case eBay v. Newmark that very much complicates this. Here is a nice summary: https://www.litigationandtrial.com/2010/09/articles/series/special-comment/ebay-v-newmark-al-franken-was-right-corporations-are-legally-required-to-maximize-profits/ https://www.litigationandtrial.com/2010/09/articles/series/s... You might also look at Dodge v. Ford Motor Company one of the more in-famous cases supporting/complicating the shareholder value "requirement". In it's opinion, the Michigan Supreme Court in-famously states: "A business corporation is organized and carried on primarily for the profit of the stockholders." Both cases deal with companies will very small numbers of shareholders where minority shareholders successfully litigated based on some argument that the majority had a responsibility to maximize their minority returns.