Where does this myth come from, and how does it survive? It's either an excuse for parasitic corporatism, or an expression of learned helplessness. Nobody has been successfully sued for prioritizing the long-term health and reputation of a company over self-starving quarterly profit.
Is there a perverse incentive toward the latter anyway? Yes. But it mostly serves current leadership, who are evaluated and paid on short horizons, at the expense of the long-term investors who own most of the equity.
"Accepting funding from investors puts you in a fiduciary role in which you’re responsible for managing their money and putting their needs above your own"
This behavior is a matter of incentives, not obligations. No need to apologize for them.
"Fiduciary duty" does not mean "pursue profit to the exclusion of all other considerations".
https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v...
https://www.legislate.ai/blog/does-the-law-require-public-co...
https://lawreview.law.ucdavis.edu/archives/56/5/end-sharehol...
https://news.ycombinator.com/item?id=20325023
https://en.wikipedia.org/wiki/Shareholder_value
So yeah, "fiduciary duty" is a real thing, but that's not quite the same thing as saying that every single decision has to be focused on nothing but profit maximization.
And this neglecting all duties besides profits thing is real, it is institutionalized by decisions of investors, by managers hired by investors, by regulators "captured" by investors and so-forth. It is the norm. But that doesn't it's a legal or ethical that a given manager or employee has, at least not currently.
I didn't say anything remotely like that, so I'm going to assume you're not trying to have a good faith discussion here, and decline to participate any further. Have a nice day.
> To quote the U.S. Supreme Court opinion in the recent Hobby Lobby case: “Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
Executives are free to pursue near-term profit at the expense of everything else if they choose, and the shareholders are free to replace them if they don't. That's a choice by those executives or shareholders though, not an obligation.
Is there an incentive to do that? Yes, or at least it's obviously quite possible. But is there an obligation? No.
Relative to the comment you were responding to, it sounded like you were defending the idea that an obligation exists.
The distinction matters because if such an obligation did exist it would effectively excuse a lot of bad behavior.
If you look at the case law for fiduciary responsibility, then you'll find that executives have a strong obligation against self-dealing (decisions that clearly benefit them at the expense of the shareholder), but not much else. The "business judgment rule" makes it generally lawful for executives to make decisions that you, the shareholders, the judge, or anyone else might consider to be bad business judgment. It couldn't really be otherwise, since the difference between wasteful spending and a wise investment in the company's reputation might be unclear even decades later.
If shareholders disagree with an executive's business judgment, then their remedy is to fire that executive. That remedy has nothing specific to "making money"--the shareholders are just as free to fire a CEO for excessive attention to profit as insufficient.
You linked an article about fiduciary responsibility, and that's also a legal obligation. If I'm an executive and I route contracts to a vendor that I own for personal gain, then the shareholders can sue me and I will lose. The state will likewise enforce that judgment, if necessary with physical force.
If I'm an executive and I choose to spend too much money (in someone's opinion) auditing a git hosting site for malware, then the possibility that I'll get sued for that and lose is zero. That's the "business judgment rule", which is a legal term of art that you can search. The shareholders might fire me, but only in the same way they could fire me for anything.
The financial incentives are obviously as you say, but the difference between "things I do because the state will physically punish me if I don't" and "things I do because I want a high-paying job" is valuable to me. I could probably make more money than I do now if I worked for a payday lender or an online casino, but I don't think that obligates me to do so.
I strongly agree that failure to stand for consumer rights is both learned helplessness and an apologist cooperator psychology. CA Voter here.
"Obligation" is the wrong word. Should be "incentive".