Comment by kbutler
6 years ago
There's a common myth that companies have "a fiduciary duty" to make as much money as possible (especially short-term), but this has no basis in law in the US.
https://caselaw.findlaw.com/us-supreme-court/13-354.html "modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so... 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. "
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co... "companies that maximize profits by firing employees, avoiding taxes, selling shoddy products or polluting the environment can harm their shareholders more than helping them."
Thing is, if a CEO doesn't pursue profit and shareholder dividends above all else, they probably won't last long until the investors and board members vote them out.
>"companies that maximize profits by firing employees, avoiding taxes, selling shoddy products or polluting the environment can harm their shareholders more than helping them."
In which case are they really maximizing profits? Wouldn't it depend upon the risk and costs of those options verses their benefits?
It's like genetic algorithms that look like they don't work because someone miscalculated exactly what the fitness function was optimizing.