[tsotha]

Sure it does. Ultimately you do what your boss wants you to do, or you look for another job. Boards know that, and CEOs know that. Of course shareholders don't have any interest in getting involved in the day-to-day stuff. But if they want something, as a group, they get it.

[ontoillogical]

You know how if you look at polling data, you'll find that a representative democracy doesn't actually act according to the will of the majority? Well, the connection between the actions of a corporation and the shareholders is even more tenuous then the connection of the public and the actions of government, there's the extra layer of the board.

[tsotha]

I think you're reaching here. Of course representative democracies don't act according to the will of the majority. First of all, not everyone votes. Secondly, and more importantly, the electoral majorities commonly want their government to pursue policies that are in opposition to each other. That is, they want both more services and lower taxes. Ask people if they want free health care and you'll get a sizable majority. But so what? Saying you want something isn't the same thing as saying you're willing to pay for it.

Corporations are no different. Shareholders want higher returns and less risk. But they ultimately get the compromise they're willing to live with.