alt Hacker NewsI said it's their biggest priority, not their only priority... solving a problem that doesn't cost money and the solution doesn't make money is bottom of the barrel. Come on guys, be real.
Replies
You used the word "obligation", not "priority". That's simply not correct, and it transfers responsibility from the people making these decisions to whatever nebulous system would enforce that "obligation".
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.
FWIW I totally agree with that. What I (and several others) disagree with is the idea that the concept of fiduciary duty confers an obligation to pursue profit at the expense of all else.
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.