Publicly traded companies (kinda) have to do what their shareholders want them to, but that doesn't have to be maximizing returns (still less maximizing returns

Publicly traded companies (kinda) have to do what their shareholders want them to, but that doesn't have to be maximizing returns (still less maximizing returns in the short term). Here's some comment on this with quotations from actual law, but note that (1) it's from the UK rather than the US and presumably the relevant laws aren't quite the same, and (2) the author's position is further to the left than is customary in the US. So discount it as you please. http://www.taxresearch.org.uk/Blog/2011/10/24/companies-do-not-have-a-duty-to-maximise-their-profits-or-to-avoid-tax/ http://www.taxresearch.org.uk/Blog/2011/10/24/companies-do-n... And a more US-centric discussion with some useful links: http://skeptics.stackexchange.com/questions/8146/are-u-s-companies-legally-obligated-to-maximize-profits-for-shareholders http://skeptics.stackexchange.com/questions/8146/are-u-s-com... And a white paper whose main topic is executive compensation but that has a useful discussion of this issue (in section 2): http://www.neiinvestments.com/neifiles/PDFs/5.4%20Research/Exec_Comp_English_Final.pdf http://www.neiinvestments.com/neifiles/PDFs/5.4%20Research/E... -- reading between the lines, it looks as if there's at least a case to be made that US case law requires corporations to act in the financial interests of their shareholders, but it's debatable, and in other jurisdictions there isn't even much of a case to be made. (I am not, even slightly, a lawyer.)