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There's a Feynman brain virus that reshapes "fiduciary duty" as "profit for shareholders uber alles".

While institutional shareholders generally mean your boss is an excel sheet seeking profit, the only "duty" to shareholders is still "do not defraud them". They can, of course, seek to change the board though...




That is right in theory, wrong in practice. You can go to jail if you violate your fiduciary responsibility, you can also fulfil your fiduciary duties and easily lose your CEO job if you do not prioritize shareholder returns. I'm talking about publicly traded US based companies, like Tesla. This is how proxy advisory services like ISS and Glass Lewis, and board politics in general work. Tesla has defied the rules for a long time, because of the massive cred for innovation and value creation that Musk has accrued over time. That is finite.


How much room is there for interpretation though?

I mean, can Musk argue that he legitimately believes battling the woke mind virus is for the benefit of Tesla shareholders and their returns on investment and thus fulfilling his fiduciary duty?


In theory shareholders can vote pretty much as they want regarding removal and approval of CEOs.

Breach of fiduciary duty however would be if CEO intentionally defrauded then of their value (essentially, through intentional bad care for the company)


Can't edit anymore, but of course I meant Friedman not Feynman.


I seem to recall that there was a US Supreme Court decision stating that that is the essential purpose of a corporation. Looking for the citation, though.


“Modern corporate law does not require for profit corporations to pursue profit at the expense of everything else.”

* https://en.wikipedia.org/wiki/Burwell_v._Hobby_Lobby_Stores,....




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