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Comment by sheepscreek | Hacker News Reader

TL;DR American companies are legally obligated to put the interests of shareholders before customers and employees. (Off-topic) This should explain why layoffs are so acceptable, even in the face of record profits.

There’s a reason why their stock price is through the roof. Companies in the US have their first and foremost duty towards Shareholders, and only shareholders. This is not an opinion, I am speaking legally.[1] And what the shareholders want is for the company to squeeze out every dollar it possibly can from its products.

[1] Shareholder Primacy: https://en.m.wikipedia.org/wiki/Dodge_v._Ford_Motor_Co.

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Please read the "Significance" section of the Wikipedia article you linked. It shows that your claim that this is a legal requirement isn't as clear-cut as you make it to be.

"...this is a legal requirement isn't as clear-cut as you make it to be."

The legal legal requirement can be questioned but heaven help the modern CEO that doesn't abide by the shareholders-first ethos. Before the 1980s (before Thatcher, Reagan, Milton Friedman, Friedrich Hayek et al era) companies had an understanding that they had a responsibility to both shareholders and the community that they operated in.

That latter notion is long since dead.

From reading your source, it doesn't really sound like a legal requirement, since the "business judgment rule" kind of supersedes it.

I think it's more that the people boards put in charge of businesses know which side of their bread is buttered on and naturally will try to make board members/shareholders happy or they'll be out of a job.

Customers/employees are treated as just means to that end.

You beg the question of whether the changes they make are good for shareholder value.

Maybe they print money in spite of the user hostile stuff.

"This is not an opinion, I am speaking legally"

Hi, as former member of a board of directors, and also as a current shareholder in a company, you are wrong. The fiduciary duties owed to the company arise from the legal relationship between the directors and the company directed and controlled by them. The fiduciary duties owed to the shareholders do not arise from that legal relationship.

Try again when you actually graduate law school. Maybe then you can speak legally about something I do PROFESSIONALLY.

You're not saying anything, though you may think you are. Fiduciary duties owed to the company arising from the legal relationship between the directors and company is just legalese disguising the actual practice of public companies. In practice, every publicly held company that is not a benefit corporation serves to maximize stakeholder earnings.

Yes but WHEN there is a conflict of interest, whose interest is put before the others? Within the confines of legality, companies have a lot of leeway when it comes to taking decisions that put customers and even their employees on the back-foot.

I did not say I am a lawyer - but that is a Supreme Court case any lawyer would be happy to cite in the court of law.

Such a snarky comment won't get anybody agreeing with you. Nor yoh actually explained anything.

Also, I was talking about the company’s fiduciary duties, NOT duties owed TO the company. You’re complete off the point here, sorry to say.

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