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Comment by philipov | Hacker News Reader

If you don't like how a company is being managed, your recourse is to pull your investment.

That wouldn't make the investors whole for past violations, which is why they are suing for breach of fiduciary duty.

Except that there are limits on fiduciary duty. It should not be confused for a right to earn money. Losing money on a bad investment is part of the game. The duty that they have is to carry out the terms of the investment prospectus and nothing more.

Shareholders have the right to not get lied to by executives. The SEC forces companies to put lots of stuff into their annual reports, giving companies lots of opportunities to lie to shareholders. Companies basically write "we aren't doing anything morally ambiguous" in their annual reports, almost always lying when they do so.

https://www.bloomberg.com/opinion/articles/2019-06-26/everyt...

Except that intentionally making bad investments fully knowing that they are bad investments is not something you can put aside as just “bad investments you lost money on”. This is absolutely something the board needs to hold the executive team accountable for and is part of their fiduciary duty.

You're right, they absolutely should.

I bet the chairman, Mark Zuckerberg, is going to steer the board to get right on with punishing the CEO, Mark Zuckerberg, for his careless administration of the company.

This. I think the executives have an obligation to state their plans so investors can decide if they want to back it. But if making top dollar is a requirement then lots of companies should liquidate and invest in other companies with higher returns or something.

You can also sue them, because the law says they have a fiduciary duty towards you.

You can also work collectively with other shareholders to directly impact the board

Activist investors have always been around.

They only pull their investments if they fail.

If a manager doesn't want to manage within the law for the benefit of shareholders, their recourse is to purchase all the shares.

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