Must Make Profits at All Costs !!!

Corporations Don’t Have to Maximize Profits / NYT article.

These five quotes are from Lynn Stout, professor of corporate and business law at Cornell Law School. Updated April 16, 2015, 6:46 AM

There is a common belief that corporate directors have a legal duty to maximize corporate profits and “shareholder value” — even if this means skirting ethical rules, damaging the environment or harming employees. But this belief is utterly false …

Serving shareholders’ “best interests” is not the same thing as either maximizing profits, or maximizing shareholder value. …

The business judgment rule gives directors protection from judicial second-guessing about how to best serve their companies and shareholders….

… the business judgment rule gives directors nearly absolute protection from judicial second-guessing about how to best serve the company and its shareholders…

In other words, it is activist hedge funds and modern executive compensation practices — not corporate law — that drive so many of today’s public companies to myopically focus on short-term earnings; cut back on investment and innovation; mistreat their employees, customers and communities; and indulge in reckless, irresponsible and environmentally destructive behaviors.

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