In alt.home.repair on Sat, 30 Jul 2005 12:57:20 GMT "Doug Kanter"
posted:


What's the difference between greed, and wanting to do more business? Are
you in a business which has a policy of not finding ways to grow?

A private owner can sacrifice profits to do what is right, without
anyone to complain about it (except maybe his wife.)

But corporate CEOs and boards are always saying they have a duty to
the stockholders to maximize profits. I wonder how true that is, in
law and in practice.


This is what little I know about it. The law could be both stricter
and/or more lenient than in practice. I think it can both at the same
time, but in different ways, of course.

The law might provide exceptions, probably does provide leeway, but
that doesn't mean that stockholders were settle for less than the
maximum. OTOH, in practice most stockholder pay little attention to
what is going on, and only a few big ones do pay attention, most of
the time. And very few vote against board nominees, nor do they have
much chance of electing an opposition slate except when things are
very bad.

Acting the "right" way is good for customer relations, even if it is
only done because it is right, so decisions about "truth in packaging"
are probably never a violation of the management's duty to maximize
profits. OTOH, at the end of the line, stockholders won't care what
went wrong if the company is losing money or making a lot less than it
did. (How is Sherwin Williams doing financially?) Like owners not
caring why a team is losing when he fires the coach. But team owners
are different because usually one person makes the decision.

I've been to one corporate annual meeting, a Fortune 500 company but I
forget which. All I remember is that the meeting was west of Rutgers
University in NJ. (at some big community college or community
auditorium iirc.) One dissenter wanted a vote on something, maybe
enviornmental although I think it was not that but similar. She
didn't even get to make a speech. This is typical iiuc. But they did
have a nice buffet in the "lobby?".

Meirman
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