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> I wish we'd pump the brakes on efficiency and profit. This is not legal, executives of publicly traded companies are required to put maximizing shareholder v
by treyd 10mo ago
> I wish we'd pump the brakes on efficiency and profit.
This is not legal, executives of publicly traded companies are required to put maximizing shareholder value above all other considerations.
- overtone1000 10mo agoI suspect the implication was that consumers and voters would do the brake pumping. I don't think anyone expects CEOs or boards to be socially conscious anymore. The idea that companies would care about externalities is quaint.
- darth_avocado 10mo agoThat’s not true. Theoretical maximum shareholder value would be achieved by firing all employees and selling the company for scraps, yet we don’t see that happening. Fiduciary duty doesn’t mean you are required to squeeze profits above all else.
- treyd 10mo agoIt would be easy to argue that would usually not maximize value in the long run, which is why they don't do that. However, some PE firms have been successfully doing similar practices.
- Spoom 10mo agoIt's not that simple. I'll point you at this Harvard Law Review article[1] to start but shareholder value is not the only consideration for executives and doesn't even need to override. 1. https://harvardlawreview.org/print/vol-137/will-the-real-shareholder-primacy-please-stand-up/ https://harvardlawreview.org/print/vol-137/will-the-real-sha...
- psunavy03 10mo agoThis is misinformation. They are accountable to whatever the board and shareholders require of them, so long as that is legal.
- MSFT_Edging 10mo agoHuh I wonder if this has anything to do why all our products are enshittifying.
- 0cf8612b2e1e 10mo agoIf it were that simple, businesses could never offer say a 10% discount or buy-one-get-one.
- deleted 10mo ago[deleted]
- triceratops 10mo agoNope nope nope. They are required to act in shareholders' interests. This is not the same thing as "stock price must go up".
- danaris 10mo agoThis is flat-out false. For reference: 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. (Emphasis added.)