[jimktrains2]

Corporations do not have the responsibility to maximize profits. Why do people keep saying this? They have a responsibility to do what is best for the corporation. Sometimes that means spending more on health coverage to retain employees, or give to charity or other programs. It's not all about money.

Often, it's almost all about the money:(

[omnibrain]

What about Dodge v. Ford Motor Company?

[ABS]

I highly recommend to just get the book [1], it's written very well and in layman terms but here's an extract taken from a review [2] of the same:

"Stout traces the birth of this “fable” to the “oversized effects of a single outdated and widely misunderstood judicial opinion.” Dodge v. Ford Motor Company was a 1919 decision of the Michigan Supreme Court. The opinion’s status as a meaningful legal precedent on the issue of corporate purpose is tenuous at best. Yet, its facts “are familiar to virtually every student who has taken a course in corporate law.” As Stout has observed in the past, “[t]he case is old, it hails from a state court that plays only a marginal role in the corporate law arena, and it involves a conflict between controlling and minority shareholders” more than an issue of corporate purpose generally.[11] The chapter explains quite well that any idea that corporate law, as a positive matter, affirmatively requires companies to maximize shareholder wealth turns out to be spurious. In fact, none of the three sources of corporate law (internal corporate law, state statutes and judicial opinions) expressly require shareholder primacy as most typically describe it. To the contrary, through the routine application of the business judgment rule, courts regularly provide prophylactic protection for the informed and non-conflicted decisions of corporate boards"

[1] "The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corportations, and the Public" by Lynn Stout http://www.amazon.co.uk/The-Shareholder-Value-Myth-Sharehold...

[2] http://arizonastatelawjournal.org/book-review-the-shareholde...

[omnibrain]

Thanks for the insight.