4 ms·

It's not just wrong, if a company is registered as "commercial" (as opposed to non-profit or public-benefit), then "for the money" is a legal obligation. Share

It's not just wrong, if a company is registered as "commercial" (as opposed to non-profit or public-benefit), then "for the money" is a legal obligation. Shareholders can literally sue the management if they don't pursue the obligation.

paulryanrogers 1y ago
Profit is not the only obligation. We all exist in a society. Poisoning the water can be very profitable, and yet shareholders cannot sue to force management to do it.
- cogman10 1y ago
  Management is often shareholders themselves and you can bet that if the fine is lower than the money saved they'll poison the water for 1000 years. We've had rivers catch fire because poisoning the water is profitable. We all exist in a society. However, the people most likely to own businesses and be successful at it seem to have no moral qualms about harming society so long as it personally enriches themselves.
  - paulryanrogers 1y ago
    My point isn't that shareholders have pure motives. It's that they are not obligated to harm society in the name of profit.
- ndsipa_pomu 1y ago
  How about management suing the shareholders that want less climate destruction? https://www.npr.org/2024/02/29/1234358133/exxon-climate-change-oil-fossil-fuels-shareholders-investors-lawsuit https://www.npr.org/2024/02/29/1234358133/exxon-climate-chan...
jaredklewis 1y ago
> Shareholders can literally sue the management if they don't pursue the obligation. Anyone can sue anyone for anything. It’s not remarkable. Now cite even a single case where shareholders sued and won. In reality, the “obligation” you are referencing has basically only ever been relevant in situations where the board or management is taking bribes. I’m not aware of any cases where shareholders won because the company was too nice to customers, the environment, or whatever. For whatever reason, “shareholders” live rent free in the heads of Internet commentators, but it’s hard to understate their actual influence.
- UzPPw337CtTbKQd 1y ago
  The Dodge v. Ford case is known for just that.
  - danaris 1y ago
    But there's also precedent in the other direction: Burwell v. Hobby Lobby Stores, Inc. - https://www.law.cornell.edu/supremecourt/text/13-354 https://www.law.cornell.edu/supremecourt/text/13-354 > While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits.
  - xethos 1y ago
    Some of the law professor quotes in Wikipedia's "Significance" section may be of interest as far as "Known For" vs "Means": > Among non-experts, conventional wisdom holds that corporate law requires boards of directors to maximize shareholder wealth. This common but mistaken belief is almost invariably supported by reference to the Michigan Supreme Court's 1919 opinion in Dodge v. Ford Motor Co. Or > Dodge is often misread or mistaught as setting a legal rule of shareholder wealth maximization. This was not and is not the law. Shareholder wealth maximization is a standard of conduct for officers and directors, not a legal mandate.
  - jaredklewis 1y ago
    Fair, this case fits the bill, but it’s interesting we have to go back more than 100 years to find one. Also worth noting that a major fact in this case is that Ford explicitly said and maintained that shareholder value was not his priority. That’s a mistake that business leaders have long since learned from. Wanna drop a billion dollars to add legs to your metaverse characters? Do whatever you want and just present a plausible argument that it serves shareholders. You don’t need evidence, any rationale is fine as long as you don’t explicitly state that you don’t care about shareholder value. Another similar case might by something like eBay v Newmark, in that to the extent shareholders got relief it was because of things the business leaders said about shareholder primacy, rather than any actual actions taken by the company. I guess that’s the real influence of shareholders: boards and executives can do whatever they want as long as when they talk, they don’t speak ill of shareholder primacy.

paulryanrogers 1y ago

Profit is not the only obligation. We all exist in a society. Poisoning the water can be very profitable, and yet shareholders cannot sue to force management to do it.

cogman10 1y ago
Management is often shareholders themselves and you can bet that if the fine is lower than the money saved they'll poison the water for 1000 years. We've had rivers catch fire because poisoning the water is profitable. We all exist in a society. However, the people most likely to own businesses and be successful at it seem to have no moral qualms about harming society so long as it personally enriches themselves.
- paulryanrogers 1y ago
  My point isn't that shareholders have pure motives. It's that they are not obligated to harm society in the name of profit.
ndsipa_pomu 1y ago
How about management suing the shareholders that want less climate destruction? https://www.npr.org/2024/02/29/1234358133/exxon-climate-change-oil-fossil-fuels-shareholders-investors-lawsuit https://www.npr.org/2024/02/29/1234358133/exxon-climate-chan...

jaredklewis 1y ago

> Shareholders can literally sue the management if they don't pursue the obligation. Anyone can sue anyone for anything. It’s not remarkable. Now cite even a single case where shareholders sued and won. In reality, the “obligation” you are referencing has basically only ever been relevant in situations where the board or management is taking bribes. I’m not aware of any cases where shareholders won because the company was too nice to customers, the environment, or whatever. For whatever reason, “shareholders” live rent free in the heads of Internet commentators, but it’s hard to understate their actual influence.

UzPPw337CtTbKQd 1y ago
The Dodge v. Ford case is known for just that.
- danaris 1y ago
  But there's also precedent in the other direction: Burwell v. Hobby Lobby Stores, Inc. - https://www.law.cornell.edu/supremecourt/text/13-354 https://www.law.cornell.edu/supremecourt/text/13-354 > While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives. Many examples come readily to mind. So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires. A for-profit corporation that operates facilities in other countries may exceed the requirements of local law regarding working conditions and benefits.
- xethos 1y ago
  Some of the law professor quotes in Wikipedia's "Significance" section may be of interest as far as "Known For" vs "Means": > Among non-experts, conventional wisdom holds that corporate law requires boards of directors to maximize shareholder wealth. This common but mistaken belief is almost invariably supported by reference to the Michigan Supreme Court's 1919 opinion in Dodge v. Ford Motor Co. Or > Dodge is often misread or mistaught as setting a legal rule of shareholder wealth maximization. This was not and is not the law. Shareholder wealth maximization is a standard of conduct for officers and directors, not a legal mandate.
- jaredklewis 1y ago
  Fair, this case fits the bill, but it’s interesting we have to go back more than 100 years to find one. Also worth noting that a major fact in this case is that Ford explicitly said and maintained that shareholder value was not his priority. That’s a mistake that business leaders have long since learned from. Wanna drop a billion dollars to add legs to your metaverse characters? Do whatever you want and just present a plausible argument that it serves shareholders. You don’t need evidence, any rationale is fine as long as you don’t explicitly state that you don’t care about shareholder value. Another similar case might by something like eBay v Newmark, in that to the extent shareholders got relief it was because of things the business leaders said about shareholder primacy, rather than any actual actions taken by the company. I guess that’s the real influence of shareholders: boards and executives can do whatever they want as long as when they talk, they don’t speak ill of shareholder primacy.