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> from business ethics class, not law Well, there was one case in the law over 100 years ago in the USA. A company had decided to sell itself for cash and go

> from business ethics class, not law Well, there was one case in the law over 100 years ago in the USA. A company had decided to sell itself for cash and go out of business. The Court ruled, that in that situation, it should sell to the highest bidder. This is long before Milton Friedman began advocating that corporations had a duty to their common shareholders that provided the only valid yardstick for evaluating corporate activities. Friedman was an economist, and a controversial one, not a lawyer, and how he got the lawyers behind him is itself a long strange story. The idea that common shareholders own the corporation was not really obvious to anyone from the start. Common shareholders get from the corporation only what is their privilege according to the corporate bylaws and charter. There are now, and have been in the past, many different kinds of and classes of common shareholders. For example, some big corporations today have many common shareholders who do not have any voting rights. The thing that sets common shareholders apart from the other stakeholders who also hold pieces of paper from the corporation granting them various interests in the corporation, is that the common shareholders get to divide up whatever is left over if and when the corporation is liquidated and everyone else is given what they are owed first. They are more heirs than owners. It is more realistic to hold that the corporation, as an artificial person, is not and cannot be owned by other persons, and owns itself.

singleshot_ 1y ago
I am repeatedly entertained by the phenomenon of someone who reads a case, bothers to remember it, thinks it's important, describes it, but does not provide a citation. Friedman deeply misunderstands agency law. Saying he got the lawyers behind him is misleading, because there are any corporate fiduciary duties owed by directors or officers to the shareholder other than 1) act informed 2) do not usurp corporate opportunity.
trollbridge 1y ago
It’s incredible how many people don’t understand this. Google is an obvious example that has multiple classes of stock and only some are voting shares. There is the “shareholder lawsuit” but that really is about enforcing a company’s stated goals to its shareholders, which can and often are things other than “try to make the stock price go up as much as possible”.

singleshot_ 1y ago

I am repeatedly entertained by the phenomenon of someone who reads a case, bothers to remember it, thinks it's important, describes it, but does not provide a citation. Friedman deeply misunderstands agency law. Saying he got the lawyers behind him is misleading, because there are any corporate fiduciary duties owed by directors or officers to the shareholder other than 1) act informed 2) do not usurp corporate opportunity.

trollbridge 1y ago

It’s incredible how many people don’t understand this. Google is an obvious example that has multiple classes of stock and only some are voting shares. There is the “shareholder lawsuit” but that really is about enforcing a company’s stated goals to its shareholders, which can and often are things other than “try to make the stock price go up as much as possible”.