> The legal concept of fiduciary responsibility, and actual de facto laws, legally compel the board of directors and executives of for-profit corporations to produce profit for their shareholders.
False. There are no laws that compel a company to produce profits for their shareholders. There is an economic _philosophy_ that argues that since the market economy is the bees knees, it follows that a company that has a higher profit is also 'better', but that does not make it a legal concept. [0]
Fiduciary responsibility in this case simply means that the directors should have the best interest of the company in mind. [1] In most cases shareholders want more money, so making more money is a natural result. But if there is a company whose single mission is to put a colony on Mars, then fiduciary responsibility compels the directors to only focus on that, even if such a colony would be less profitable than setting money on fire.
False. There are no laws that compel a company to produce profits for their shareholders. There is an economic _philosophy_ that argues that since the market economy is the bees knees, it follows that a company that has a higher profit is also 'better', but that does not make it a legal concept. [0]
Fiduciary responsibility in this case simply means that the directors should have the best interest of the company in mind. [1] In most cases shareholders want more money, so making more money is a natural result. But if there is a company whose single mission is to put a colony on Mars, then fiduciary responsibility compels the directors to only focus on that, even if such a colony would be less profitable than setting money on fire.
[0] https://www.investopedia.com/terms/s/shareholder-value.asp#t... [1] https://www.law.cornell.edu/wex/fiduciary_duty