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Comment by j_baker | Hacker News Reader

The CEO most certainly does not represent the shareholders. The shareholders elect a board to represent them. The CEO represents the company's management, and is responsible for attaining the goals the board sets for him/her. It's worth pointing out that those goals aren't necessarily getting a high stock price or maximizing revenue. Lately, there have been a number of companies that set goals that have more to do with social goals than specific financial goals.

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Sorry, it should have read: "Because the CEO represents the interests of the shareholders".

While the CEO is not (absent other roles) a representative of the shareholders (as you pointed out), there is a legal duty of loyalty to act in the best interest of the shareholders.

So while not a representative of the shareholders, the CEO is always responsible for representing the interests of the shareholders.

As you stated, those goals aren't necessarily related to the stock price or maximizing revenue. However, if the interest of the shareholders is something other than those goals, the CEO still has a legal fiduciary responsibility to act as a representative of the shareholder interests that do exist.

I suppose that's true in principle. But in practice, the CEO has to be pretty flagrantly acting against the shareholders' interests (embezzling, "cooking the books", etc) to be held legally liable. The case law here is predicated on the belief that "judges are not business experts", and I agree with that sentiment. Courts shouldn't be telling company management what is and isn't in their shareholders' best interests. It's up to corporate management to make that determination, and that's the way it should work.

Quite right it is the chairman of the board (or in this case the president) who is effectively the boss of the C levels and its the boards responsibilities to look after the share holders a CEO/COO/CFO is just another worker.

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