Well, a publicly traded company has the fiduciary obligation to make its shareholders money. So it really does not matter what the "the people" want, it matters what the shareholders want. In fact, the board and executive team are legally required to make the the decisions that make increase the value of the company. They could be in real trouble with the law if they knowingly do something that devalues the company.
It's not to say that the employees don't have some power. Shareholders may play along with their request while figuring out how to maximize the profits and avoid such road bumps as this in the future.
So in the end you have to weigh the wants/needs of the employees and how much money might be lost or gained if you go along with their demands vs how much money can be made or lost if you ignore them.
I could see a argument that upsetting your employees could lead to a value drop that might be greater than whatever contract they are protesting. But it is hard to judge, and it will often only be looked at quarter to quarter.
Now if you give the impression that you are all bout money but don't act like it then shareholders can be rightfully upset. But if you clearly state your values and ambitions and shareholders don't like it? Then, sucks to be them! There is nothing more to it than that.
Serving shareholders’ “best interests” is not the same thing as either maximizing profits, or maximizing shareholder value. "Shareholder value," for one thing, is a vague objective: No single “shareholder value” can exist, because different shareholders have different values. Some are long-term investors planning to hold stock for years or decades; others are short-term speculators.
I am sorry, I think both you and Lynn Stout, are wrong, regardless of her credentials -- she sort of is making a name of her self by swing this sort of nonsense -- so her articles are self serving.
And yes, we can define shareholder value -- its the stock price. But I see your point and why I have talked about the grey area of what is the best move. But you would be hard pressed to find a group of shareholders who who all agree not taking big contracts is going to be the best move.
It doesn't matter if the shareholders believe it is not the best move. It matters if the board believes it is the best move for the long term benefit of the company and its shareholders. The duty of loyalty does not require a board to do everything the shareholders want or to maximize short term profits. If a majority of the shareholders disagree they can vote to replace the board, but that doesn't mean the board hasn't met its fiduciary duty.
If the companies value and ambition is to maximize the stock price then the stock price is a good metric. If the companies value is something else then stock price isn't really a good metric.
It will also attract shareholders that share those values and thus going against them will cause an uproar.
It really depends on their charter. People don't park money in a company simply to have the stock value drop or stay the same -- with exception of companies who pay out dividends.
Most companies charters talk about their relationship and obligations to the shareholders -- people don't invest in companies that don't intend on increasing in value.
Again, value doesn't have to be monetary. Shareholders has the right to expect return on their investment, yes. If the company delivers on their ambitions and values then that is the shareholders reward.
If the stock market is as amoral as you think then it seems something ought to be done to the stock market. But I don't think most people would invest in something that goes starkly against their personal ethics, no matter how profitable. And if you regard following one's moral compass as just "virtue gaming" I'm not sure what to think.
That is not how that works. A company -- with a few special exceptions and special charters -- ONLY goal is to increase value for this shareholders. A single shareholder with a non majority holding can sue if the company knowingly does something that causes the values of his shares to decrease -- even if the rest of the shareholders are okay with the loss because they agree with the sentiment.
There is some grey area along strategy short game vs long game, but a company's charter is to increase the value of its shareholders -- THE ONLY THING that literally matters for a publicly traded company*
* Some companies can be setup with a different charter that does not prioritize profit, but google and most of the publicly traded companies on the market today are not those. And it would be very hard to convert to such a company.
This might sound weird but some people (and companies) don't subscribe to the notion that money is the only thing that matters.