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> His job is to work for the benefit of shareholders, and if he can't do that then it's simply a case of firing him. I was under the impression that the fiduci
by throw0101d 2y ago
> His job is to work for the benefit of shareholders, and if he can't do that then it's simply a case of firing him.
I was under the impression that the fiduciary duty was to the company/corporation. At least that's the case in Canada (2008 SCC 69):
* https://www.fasken.com/en/knowledge/doing-business-in-canada/10-directors-officers-liability https://www.fasken.com/en/knowledge/doing-business-in-canada...
(Further, legally speaking, the shareholders are not legally the owners of a company, just another type of stakeholder.)
- p_l 2y agoThere's a Feynman brain virus that reshapes "fiduciary duty" as "profit for shareholders uber alles". While institutional shareholders generally mean your boss is an excel sheet seeking profit, the only "duty" to shareholders is still "do not defraud them". They can, of course, seek to change the board though...
- throwaway5752 2y agoThat is right in theory, wrong in practice. You can go to jail if you violate your fiduciary responsibility, you can also fulfil your fiduciary duties and easily lose your CEO job if you do not prioritize shareholder returns. I'm talking about publicly traded US based companies, like Tesla. This is how proxy advisory services like ISS and Glass Lewis, and board politics in general work. Tesla has defied the rules for a long time, because of the massive cred for innovation and value creation that Musk has accrued over time. That is finite.
- decafninja 2y agoHow much room is there for interpretation though? I mean, can Musk argue that he legitimately believes battling the woke mind virus is for the benefit of Tesla shareholders and their returns on investment and thus fulfilling his fiduciary duty?
- p_l 2y agoIn theory shareholders can vote pretty much as they want regarding removal and approval of CEOs. Breach of fiduciary duty however would be if CEO intentionally defrauded then of their value (essentially, through intentional bad care for the company)
- quantified 2y agoI seem to recall that there was a US Supreme Court decision stating that that is the essential purpose of a corporation. Looking for the citation, though.
- deleted 2y ago[deleted]
- throw0101d 2y ago“Modern corporate law does not require for profit corporations to pursue profit at the expense of everything else.” * https://en.wikipedia.org/wiki/Burwell_v._Hobby_Lobby_Stores,_Inc https://en.wikipedia.org/wiki/Burwell_v._Hobby_Lobby_Stores,....
- p_l 2y agoCan't edit anymore, but of course I meant Friedman not Feynman.