Well I think taken literally, "not maximizing profit" can't possibly be sufficient grounds for an action. Nobody really has any idea of whether any particular strategy is profit-maximizing, so it's hard to believe a company can be sued for not following a profit-maximizing strategy.
But shareholders can sue over alleged harm to a corporation. I'm not a lawyer, so I really have no idea what the standard is here. But purely speculatively, I suppose someone could be sued for repeatedly missing obvious profit opportunities because the executives objected to them on ethical or other grounds.
I get the impression, though, that shareholders are more likely to sue for committing an active blunder (like selling off a division for an insanely low price) rather than for missing an opportunity.
More charitably, I think what people like quadrangle are really meaning to say is that there is a significant legal framework that very strongly incentivizes and is inspired by the idea that the first obligation of a corporation is to maximize profit. And if that was the point, then I think that's pretty close to the truth.
Sure, you won't be arrested for not maximizing profit, but remaining in business without attempting to put profit first is sufficiently hard that it typically requires special legal protections (as in B corporations).
Ah, I finally begin to see what you mean. Sorry if I've been a bit boneheaded in this thread. I finally started googling instead of speculating, and I found this thread: https://www.reddit.com/r/law/comments/3pv8bh/is_it_really_tr...
which seems to confirm your ideas about the significance of benefit corporations. It looks like the key legal case happened surprisingly recently - 2010.
Apologies again: you were right and I was blinkeredly literal.
But shareholders can sue over alleged harm to a corporation. I'm not a lawyer, so I really have no idea what the standard is here. But purely speculatively, I suppose someone could be sued for repeatedly missing obvious profit opportunities because the executives objected to them on ethical or other grounds.
I get the impression, though, that shareholders are more likely to sue for committing an active blunder (like selling off a division for an insanely low price) rather than for missing an opportunity.
There's a list of some famous shareholder actions here: https://www.dandodiary.com/2014/12/articles/shareholders-der...
More charitably, I think what people like quadrangle are really meaning to say is that there is a significant legal framework that very strongly incentivizes and is inspired by the idea that the first obligation of a corporation is to maximize profit. And if that was the point, then I think that's pretty close to the truth.
Sure, you won't be arrested for not maximizing profit, but remaining in business without attempting to put profit first is sufficiently hard that it typically requires special legal protections (as in B corporations).