I agree with you almost entirely. "Maximize return on invested capital" is a horrible goal. It's not even the real goal of most investors. Retirees have most o

I agree with you almost entirely. "Maximize return on invested capital" is a horrible goal. It's not even the real goal of most investors. Retirees have most of their money in bonds-- stock gives better returns, and exotic vehicles do better than that (on average)-- but at that age, they don't want the risk. Investment isn't about "maximizing returns". It's about managing risk. Applying calculus and basic knowledge of derivative securities, I can come up with an investment strategy that has an EV of +50% on one year... but that has a good chance of leaving you utterly hosed. (Load up on beta using out-of-the-money call options.) Also, the claim that CEOs are legally required to operate in short-term shareholder interest is a common misconception, but it's not true. There is no such law. CEOs aren't allowed to make decisions to the advantage of their personal financial benefit while hurting the company (that's called "stealing") and if they use dishonest means, they can go to jail. But a CEO who prioritizes a subjective health concern (sustainability, ethical business, fairness in compensation) isn't doing anything illegal. It's the CEO who gets caught embezzling funds who goes to jail, not the one who increases salaries by 10% to improve morale. Now, there are a lot of sociopathic executives who use this "legal obligation" (to maximize short-term shareholder returns) to justify a lot of selfish and questionable things (that benefit their bosses, and thus them) but the truth about it is that it doesn't exist. It's an excuse. Classic negotiation tactic: It's Not Up To Me. Healthier companies, I would argue, are less prone to downside-heavy but often invisible (non-financial) risks. If everyone feels micromanaged, overworked, and underpaid, then you're at risk of external "poachers" if the job market improves. This doesn't show up on a balance sheet, but it's pretty critical. I've written a lot about these issues here: http://michaelochurch.wordpress.com/2013/03/26/gervais-macleod-17-building-the-future-and-financing-lifestyle-businesses/ http://michaelochurch.wordpress.com/2013/03/26/gervais-macle...