One of the most pernicious and harmful lies of the past 50 years.
Management is obliged to act in shareholders' interests. Executives are paid in stock. Maximizing earnings makes the stock price go up, which makes executives more money personally. So they're happy to let everyone believe they are legally required to make the stock price go up.
There is no law or court precedent making it illegal for management to de-prioritize short-term profit as long as they aren't hurting the shareholders interests and advancing their own.
You're not though, legally anyway. Courts will generally not second-guess a board's business decisions so long as the board acted in "good faith" even if that decision results in loss for shareholders, or does something that does not maximize their returns.
Board just has to link the decision and the long term health of the company. But it's just that, health of the company which is legally distinct from the health or short-term desires of individual shareholders and investors.
Sometimes I think it’s time to give shareholder supremacy a rest. If they don’t like what they own, they can sell it. But this is probably also why I’m not on a board of directors.
> “When we work on making our devices accessible by the blind, I don’t consider the bloody ROI,” Cook said. “If you want me to do things only for ROI reasons, you should get out of this stock.”
That was back in 2014.
But I do agree, it's time to normalize telling shareholders where they can shove it. If they don't like it, they can sell.
This is not true. Fiduciary responsibility does not mean "maximize earnings". This one fiction has done more damage in the name of unfettered capitalism than anything else.