[sausman]

This is my biggest qualm with building a company aimed to sell (either to public markets or another company). You are binding yourself to pursue as much profit as possible through whatever legal means possible. Even if those legal means go against everything you stand for, you have to pursue them because you have a fiduciary duty.

[phil21]

> Even if those legal means go against everything you stand for, you have to pursue them because you have a fiduciary duty.

This is not true, and never has been even a little bit true (in the US). It's a commonly misquoted trope.

Assuming your company happens to be public (the only way this matters) - you still can do whatever you like as controlling CEO short of outright fraud or negligence. If you decide to switch your Fortune 500 company to it's sole goal being charity - you could definitely do that without going to jail or being liable for anything.

You might lose your job though.

If you own a private company you started yourself and own the equity? You can do everything up to and including burning the building down.

[sausman]

> You might lose your job though.

That's what I was trying to get at. I didn't mean to make it sound like you'd go to jail.

[db48x]

Burning down a building that you actually for-real own might not be illegal, but be careful what you tell your insurer. The fire marshall might be annoyed as well, so warn him first. I wonder if the EPA would have questions as well...

[lumisota]

"Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.": http://caselaw.findlaw.com/us-supreme-court/13-354.html

[sausman]

Interesting, I thought you had to be a special type of corporation for that. My language is a bit strong then.

[ClassyJacket]

However, if you do not, your investors can sue you and win, no?

[_delirium]

They can sue yes, less likely to win. Modern courts really don't want to second-guess management strategies, and instead focus on things like fraud, conflicts of interest, and misrepresentation. If the company openly said that they are going to pursue policy X because they think this is in the long-term best interests of the company, and some shareholders sue to argue that it isn't, courts are rarely going to step in and try to determine that management should've pursued some other strategy. For one thing, they aren't really equipped to determine what would be the right course of action (valuing things like "goodwill" is not really an exact science), and for another, shareholders already have a mechanism for resolving those questions among themselves: shareholder votes.

Instead, to win a shareholder lawsuit you usually need much more of a smoking gun, things like being able to show that the CEO pursued a certain deal because his brother owned the other company, or that a group of controlling shareholders are having their chosen board take certain actions that deliberately screw over minority shareholders, that kind of thing.

[lumisota]

Sure; companies are required to generate value for shareholders. That does not necessarily mean profit.

[acjohnson55]

I'm no expert, but I'm pretty sure fiduciary obligations don't entail that.