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The simple answer is no. What companies are enjoined from doing is purposefully working against the interests of the corporate good (and by extension sharehold

The simple answer is no. What companies are enjoined from doing is purposefully working against the interests of the corporate good (and by extension shareholders). What that “good” is, is very fuzzy. But roughly speaking it means you can’t take gross actions that will clearly significantly harm the company, and that you know it will cause harm. A good example would be Twitter. If it was still public, I think a case could be made the Musk took a number of gross actions that directly and materially harmed the company.

stronglikedan 4y ago
Seeing as how Twitter use has skyrocketed since Musk freed the bird, I'd say that would be a very hard case to prove. Especially considering all the worldview changing revelations that have been allowed to come to light on the platform since.
SamBam 4y ago
> the corporate good (and by extension shareholders) The top answer (after the second edit) makes a very good and explicit distinction between the corporation and the shareholders. The shareholders do not, in fact, own the company, they have just entered into a contract with it that grants them certain rights. This means you can do things that are good for the company that are not necessarily good for the shareholders (and vise versa).
narrator 4y ago
The Delaware courts interpret the Business Judgment Rule[1] very liberally. That's because there is risk in business, and corporations take risks and lose all the time, and that's just capitalism. The court is not there to determine what risks are good business and which are bad business. The big thing you aren't allowed to do that happens with some regularity is breach the duty of loyalty by engaging in self-dealing transactions, trade using inside information, or taking opportunities that are presented to the corporation for your other businesses. [1] https://en.wikipedia.org/wiki/Business_judgment_rule https://en.wikipedia.org/wiki/Business_judgment_rule

stronglikedan 4y ago

Seeing as how Twitter use has skyrocketed since Musk freed the bird, I'd say that would be a very hard case to prove. Especially considering all the worldview changing revelations that have been allowed to come to light on the platform since.

SamBam 4y ago

> the corporate good (and by extension shareholders) The top answer (after the second edit) makes a very good and explicit distinction between the corporation and the shareholders. The shareholders do not, in fact, own the company, they have just entered into a contract with it that grants them certain rights. This means you can do things that are good for the company that are not necessarily good for the shareholders (and vise versa).

narrator 4y ago

The Delaware courts interpret the Business Judgment Rule[1] very liberally. That's because there is risk in business, and corporations take risks and lose all the time, and that's just capitalism. The court is not there to determine what risks are good business and which are bad business. The big thing you aren't allowed to do that happens with some regularity is breach the duty of loyalty by engaging in self-dealing transactions, trade using inside information, or taking opportunities that are presented to the corporation for your other businesses. [1] https://en.wikipedia.org/wiki/Business_judgment_rule https://en.wikipedia.org/wiki/Business_judgment_rule