this post was submitted on 27 Oct 2023
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“The best interest of the business” is far too lenient in its wording. Some of the shareholder derivative lawsuits out there are fucking wild.
Simple things such as “paying your workers too much”, “acting with too much emphasis on morality over capital gains”, it all does have to come back to shareholder profits, ever since Dodge Vs. Ford.
That's not what was decided in Dodge v. Ford. That case decided that corporations are allowed to act in the interest of majority shareholders even if it hurts the interests of minority shareholders. The Dodge brothers owned Ford shares and were trying to use their position to force Ford to stop competing with Dodge.
Further:
"In fact, courts have consistently refused to hold directors liable for failing to maximise shareholder value."
"In 2014, the United States Supreme Court voiced its position in no uncertain terms. In Burwell v Hobby Lobby Stores Inc., the Supreme Court stated that “Modern corporate law does not require for profit corporations to pursue profit at the expense of everything else”.
https://legislate.ai/blog/does-the-law-require-public-companies-to-maximise-shareholder-value
The idea that corporations are hamstrung and simply must do evil things to maximize profit is actually just corporate propaganda.
Re the second part: this works differently in delaware, where over half of all fortune 500 companies were incorporated.
Willfully ignoring the minor detail about ford being sued to stop enriching the lives of their workers says enough about how productive this conversation’s going to be.
And yet that's how it works, because business is not a linear thing. Do you have any idea how long "MUXEMOOSE PROOFITS!!!!" types have been whining about the price of Costco's hot dog?