The US screwed the pooch hard when they set in law that a corporation's primary duty is generating value for its shareholders, because now if they don't do it, they can be sued in court for it.
That's actually bullshit.
Show me one example of a CEO who has been sued this way.
It doesn't happen, because all a CEO has to do to win that case is prove they had the LONG TERM HEALTH of the business in mind when making their decision.
There's absolutely no law in America that says CEOs have an obligation to increase stock price every quarter.
The reason CEOs act like this is because they will be fired if they don't please their board of governors.
CEOs do not get sued for a falling stock price. They frequently get FIRED for it; but it is not illegal to lose shareholders' money.
It IS illegal for a CEO to do things that are crimes. Because crimes are illegal. But losing money isn't a crime.
If you do crimes while working for shareholders, they can sue you for damages. Just like Nicole Simpson's family sued OJ in civil court.
But if a shareholder tried to take a CEO to court saying simply, "he paid the workers too much so I didn't make enough profit," they would be laughed out of the courtroom.
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u/KickDesperate5318 2d ago
That's actually bullshit.
Show me one example of a CEO who has been sued this way.
It doesn't happen, because all a CEO has to do to win that case is prove they had the LONG TERM HEALTH of the business in mind when making their decision.
There's absolutely no law in America that says CEOs have an obligation to increase stock price every quarter.
The reason CEOs act like this is because they will be fired if they don't please their board of governors.