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Comment by themafia | Hacker News Reader

So what amount of profits insulates you from lack of fiduciary responsibility?

"It's okay set millions of dollars on fire because we have billions in this pile over here!"

The concept of fiduciary duty is an economic professors fantasy. When the shareholders of WB voted against David Zaslovs extraordinary 800m pay package the board ignored it. That's the "owners" voting to not give a crazy gift to the guy who was CEO for like 3 years and incredibly well paid.

No, what insulates them from fiduciary responsibility is the fact that there is no fiduciary responsibility to shareholders. I’ll say that again: members and/or managers of an LLC, and officers and directors of a corporation owe no fiduciary responsibility to the shareholders to make them money. The fiduciary duties owed under US law are as follows: 1) the duty to be informed; 2) the duty not to usurp corporate opportunities.

As far as I can tell the fiduciary duty to make money for the shareholders is something that Jack Welsh of GE said enough times that people remembered it. However, I’m always interested in additional details concerning the history of this meme, and happy to learn more.

(The first person to observe that an LLC has no shareholders gets a lawyer high five).

This is true in some states, like Texas; but not in Delaware where Disney is incorporated and where directors and officers owe fiduciary duties of care and loyalty to both the corporation and the shareholders.

(Not legal advice. I'm not licensed in either state.)

You are correct to note that there are two fiduciary duties: the duty of care, and the duty of loyalty. However, you are incorrect to imply I stated the law incorrectly.

The duty of care is otherwise known as the duty to be informed. And the duty of loyalty is otherwise known as the duty not to usurp corporate opportunities. I stated the law in Delaware, which is consistent with the law on the rest of the United States on these points.

You and I simply use two different sets of words to describe the only two fiduciary duties of an officer.

None of those mean "duty to make money for the shareholders" though.

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