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by civilized 1225 days ago
The corporate fiduciary duty to maximize profit is a discredited myth that unfortunately has been propagated for decades by persistent misinterpretation of bad case law (Dodge v. Ford), compounded by simple inertia, ignorance, and (I speculate) the partnership of unenlightened neoliberal ideology with the cynical short-term self-interest of wealthy corporate shareholders.

Corporate leaders are expected to act in the interests of shareholders, but their legal obligations are satisfied if they can argue that their business judgment supported their chosen direction. And business judgment can consider the long term, it can consider the value of a thriving society in general, it can consider much besides short-term maximization of profit. Fiduciary duty exists only to curb overtly abusive self-dealing.

For more on this, see The Shareholder Value Myth by Lynn Stout. She has written a gloss on it here [1]. Her seminal 2008 legal review article, "Why We Should Stop Teaching Dodge v. Ford" [2], is a delight to read and I highly recommend it.

[1] https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?arti...

[2] https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?arti...
2 comments
dheera 1225 days ago
I get it, but you do realize that Intuit does exist because taxes are so damn complicated in the US?

If taxes were simple, their predatory business model really would stop existing. There is no business justification in favor of Intuit to NOT sue the IRS if the IRS tries to make taxes simple.

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7sidedmarble 1225 days ago
What exactly is the difference between it being in their general interests to maximize profit besides where that interest conflicts with the law, and it being their legal duty to do so instead? Does it not result in the same thing? Companies break the law all the time in the interest of the profit motive.
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civilized 1225 days ago
It matters because there is one less rationalization for why we have to tolerate corporate leaders engaging in evil. It is their free choice, not a legal obligation, and that should affect how we think about them as moral agents in society.

Maybe it also helps them realize that they have a choice too, that they are not "just following orders" from the legal system.

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