Comment on Why do companies always need to grow?
fodor@lemmy.zip 3 weeks agoThat is a myth. The law is actually far more complicated, at least in the U.S., and presumably elsewhere too.
Comment on Why do companies always need to grow?
fodor@lemmy.zip 3 weeks agoThat is a myth. The law is actually far more complicated, at least in the U.S., and presumably elsewhere too.
cdf12345@lemmy.zip 3 weeks ago
Please elaborate because everything written above is correct. Companies must maximize value.
The leading statement of the law’s view on corporate social responsibility goes back to Dodge v. Ford Motor Co, a 1919 decision that held that “a business corporation is organized and carried on primarily for the profit of the stockholders.” That case — in which Henry Ford was challenged by shareholders when he tried to reduce car prices at their expense — also established that “it is not within the lawful powers of a board of directors to shape and conduct the affairs of a corporation for the merely incidental benefit of shareholders and for the primary purpose of benefiting others.”