3 ms·

I don't think that's actually true. e.g. a quick google search turns up [1] [2] [3] which all state that a board is not legally obligated to maximize shareholde

I don't think that's actually true. e.g. a quick google search turns up [1] [2] [3] which all state that a board is not legally obligated to maximize shareholder value. Do you have a source for the law/court decision? [1] https://www.nytimes.com/roomfordebate/2015/04/16/what-are-corporations-obligations-to-shareholders/corporations-dont-have-to-maximize-profits https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... [2] https://insight.kellogg.northwestern.edu/article/shareholder-value-purpose-corporation https://insight.kellogg.northwestern.edu/article/shareholder... [3] https://medium.com/bull-market/there-is-no-effective-fiduciary-duty-to-maximize-profits-939ae50d0572 https://medium.com/bull-market/there-is-no-effective-fiducia...

mason55 3y ago
Well, OP did say > a corporation is there for its shareholders Which is a little different from maximizing shareholder value and is kinda true. As the second link says > a CEO or board is not legally obliged to maximize shareholder value. They need to maximize the value of the corporation and act in its best interest. Which IMO agrees with OP. The company is there for the shareholders. The execs and directors have a ton of leeway when it comes to acting in the corporations best interest, but if an exec would be in trouble if they said "we're implementing this policy for the benefit of employees and it's going to come at the expense of the company and we have no argument for how this is good for the company". But it's not that hard to take the same policy and say "happier employees are good for the company"