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> The CEO is supposed to act in the best interests of the company, which may not be ideal for short term profit. You're the one who added "short term" to profi
by nordsieck 3y ago
> The CEO is supposed to act in the best interests of the company, which may not be ideal for short term profit.
You're the one who added "short term" to profit.
The CEO is supposed to maximize the discounted future earnings of the company.
- rootusrootus 3y agoTrue, I did add those words. Because "long term profit" is not a hard metric that can be defined, it's identical to "best interest of the company."
- dragontamer 3y agoThe goal of a company is to listen to its shareholders. And shareholders _usually_ care about long term profits. But a group of investors, calling themselves ESG, are now caring about ESG issues. If ESG investors grab hold of your company's shares and become the owner of the company, it becomes the company's responsibility to listen to the (now ESG-aligned) shareholders. Its mutually beneficial. ESG has enough money that its worth pursuing their money. And ESG is a vague enough political concept that the pool of investors is rather large in practice. Yeah, people like to make fun of how stupid the metrics are and all that, but... vagueness is kinda the point. They're trying to be as large as possible so that ESG issues can even come up in board meetings.
- mgfist 3y agoSure but under the guise of "long-term profits" you can justify almost anything. For example, you could say "we need to beat climate change, otherwise there won't be any profits on a dead earth".
- nordsieck 3y ago> Sure but under the guise of "long-term profits" you can justify almost anything. That's why the metric is discounted future earnings. So that you can't "justify almost anything".