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The debate may be over whether short-term or long-term goals are a higher priority, but both sides are based on the understanding that company leadership has a

The debate may be over whether short-term or long-term goals are a higher priority, but both sides are based on the understanding that company leadership has a fiduciary duty to shareholders.

rawgabbit 3y ago
The nuance is that fiduciary duty does not mean sacrificing your future as a business for short term profits. This Milton Friedman definition needs to stop. What Milton Friedman was advocating was the law of the jungle where corporations have the fiduciary duty to cheat lie and steal from their customers employees and vendors. By this definition the Sackler’s Purdue Pharma should be lauded for foisting the opioid epidemic on the American public.
throw0101b 3y ago
> […] but both sides are based on the understanding that company leadership has a fiduciary duty to shareholders. Not really? Kind of? Yes, directors have a "fiduciary duty to shareholders" but they also have a fiduciary duty to the corporation itself. § 102(b)(7): * https://delcode.delaware.gov/title8/c001/sc01/ https://delcode.delaware.gov/title8/c001/sc01/ Further, you have to ask which shareholders: > Serving shareholders’ “best interests” is not the same thing as either maximizing profits, or maximizing shareholder value. "Shareholder value," for one thing, is a vague objective: No single “shareholder value” can exist, because different shareholders have different values. Some are long-term investors planning to hold stock for years or decades; others are short-term speculators. * 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...
- _heimdall 3y ago
  I think we're in agreement here. I wasn't trying to say that corporate leadership is bound to a specific interpretation of what "best interests" means. That was actually my point in the GP comment, though I may not have phrased it clearly enough. The article and quotes linked earlier are just calling out that there's a debate as to how "best interests" is interpreted. Some may see that and consider short term profits, others may use it to justify focusing on long term profits and company health. The debate is there for sure and the law is vague enough to allow many interpretations, but all interpretations still have to be based on the idea that leadership is doing what they believe is in the shareholders' best interests in one way or another.

The debate may be over whether short-term or long-term goals are a higher priority, but both sides are based on the understanding that company leadership has a fiduciary duty to shareholders.

rawgabbit 3y ago

The nuance is that fiduciary duty does not mean sacrificing your future as a business for short term profits. This Milton Friedman definition needs to stop. What Milton Friedman was advocating was the law of the jungle where corporations have the fiduciary duty to cheat lie and steal from their customers employees and vendors. By this definition the Sackler’s Purdue Pharma should be lauded for foisting the opioid epidemic on the American public.

throw0101b 3y ago

> […] but both sides are based on the understanding that company leadership has a fiduciary duty to shareholders. Not really? Kind of? Yes, directors have a "fiduciary duty to shareholders" but they also have a fiduciary duty to the corporation itself. § 102(b)(7): * https://delcode.delaware.gov/title8/c001/sc01/ https://delcode.delaware.gov/title8/c001/sc01/ Further, you have to ask which shareholders: > Serving shareholders’ “best interests” is not the same thing as either maximizing profits, or maximizing shareholder value. "Shareholder value," for one thing, is a vague objective: No single “shareholder value” can exist, because different shareholders have different values. Some are long-term investors planning to hold stock for years or decades; others are short-term speculators. * 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...

_heimdall 3y ago
I think we're in agreement here. I wasn't trying to say that corporate leadership is bound to a specific interpretation of what "best interests" means. That was actually my point in the GP comment, though I may not have phrased it clearly enough. The article and quotes linked earlier are just calling out that there's a debate as to how "best interests" is interpreted. Some may see that and consider short term profits, others may use it to justify focusing on long term profits and company health. The debate is there for sure and the law is vague enough to allow many interpretations, but all interpretations still have to be based on the idea that leadership is doing what they believe is in the shareholders' best interests in one way or another.