And, insofar as such an obligation to “maximise shareholder value” might exist, that obligation doesn’t necessarily translate into “maximise profit”.
The shareholders of a theatre company might care more about breaking even while getting an interesting assortment of plays produced with a great cast than they do about making a bunch of money out of the venture, so an executive who makes a bunch of money by running productions of uninspired cash grab shows won’t actually be maximising value. Likewise, I’m sure that Rob McElhenney and Ryan Reynolds care more about Wrexham AFC’s managers getting good athletic results than they do about making a bunch of money.
>And, insofar as such an obligation to “maximise shareholder value” might exist, that obligation doesn’t necessarily translate into “maximise profit”.
And even where it does translate into "maximise profit" because it's what shareholders of a particular company may want, there is no timeframe for it, and there is no way to tell whether any particular decision by the CEO runs contrary to the goal of eventually maximising profits.
Companies can spend all their revenues plus a constant stream of new capital on growing market share or revenue, on charitable activities or the happiness of employees, on huge research and development projects or on restructuring after restructuring and still credibly claim that all of it is ultimately meant to maximise profits.
The point where CEOs and CFOs have to be careful is when the company faces solvency issues. That's where legal limits of freewheeling decision making kick in, because it's where it's no longer about shareholders but about creditors.
And, insofar as such an obligation to “maximise shareholder value” might exist, that obligation doesn’t necessarily translate into “maximise profit”.
The shareholders of a theatre company might care more about breaking even while getting an interesting assortment of plays produced with a great cast than they do about making a bunch of money out of the venture, so an executive who makes a bunch of money by running productions of uninspired cash grab shows won’t actually be maximising value. Likewise, I’m sure that Rob McElhenney and Ryan Reynolds care more about Wrexham AFC’s managers getting good athletic results than they do about making a bunch of money.