[nybble41]

Going by your broader definition, then: If there are shareholders, and there is any kind of fiduciary duty at all, then it must be to the shareholders. The officers of the corporation cannot act solely in the interest of more than one master. If they must act solely in the interest of some other party with mostly opposing interests, such as the employees, then there will be no non-employee shareholders. It would defeat the point of holding an equity stake in the company.

The officers and board represent the shareholders because the shareholders own the company. The employees do not own the company. Their relationship to the company is transient at best; they have an ongoing and hopefully amicable relationship but no real stake in the company's future. Either side can terminate the employment contract at will with at most a few weeks' notice and some minor payout (or payback) of (un)accrued benefits. If a given employee wants to take an equity position in the company and obtain some influence and a portion of the profits they have only to purchase some shares, but in practice they would probably be better off investing that same money in a more diversified portfolio. I myself could hold a "democratic" share in my employer (market cap divided by number of employees) right now via my 401k if I put most or all of it in company stock, but I'd really rather not take that kind of risk.

[tonyarkles]

Everything you said is true, and at the same time misses an important nuance. Yes, your obligation is to maximize shareholder value, but there are an infinite number of ways to do that. Treating your employees like crap and paying them the minimum you can may temporarily maximize your returns for a quarter, but your hiring and training costs will rose as employee turnover goes up. “We treat our employees well because we believe that that maximizes our organization’s long term productivity and profitability“ is a perfectly reasonable approach to addressing your fiduciary duty to your shareholders.