Publicly-held corporations are legally obligated to think only of line go up. Valve (Steam) is privately held, and as such is not forced to maximize profit every quarter.
This is one of those almost correct things that people love saying, but it’s not the whole story. Publicly held corporations are obligated to serve their shareholders’ best interests, but executives are given tons of leeway and the benefit of the doubt in both how that goal is defined and how they choose to pursue it.
The Dodge v Ford case that established the idea of shareholder primacy was back in 1919. America’s entire Golden Age of manufacturing came after that decision. If companies were charged with only providing quarterly profits, then there wouldn’t have been decades of corporate reinvestment and expansion, employee training and education, narrower exec-to-employee pay gaps, or any of the other things people seemed to love about pre-Reagan America.
None of these companies have a legal obligation to be shitty. They’re just incentivized because nobody says or does anything.
It’s even more depressing that it’s a conscious choice, and the exception is a company that wanted didn’t want to pay for birth control for their employees. But thank you for the correction.
Publicly-held corporations are legally obligated to think only of line go up. Valve (Steam) is privately held, and as such is not forced to maximize profit every quarter.
This is one of those almost correct things that people love saying, but it’s not the whole story. Publicly held corporations are obligated to serve their shareholders’ best interests, but executives are given tons of leeway and the benefit of the doubt in both how that goal is defined and how they choose to pursue it.
The Dodge v Ford case that established the idea of shareholder primacy was back in 1919. America’s entire Golden Age of manufacturing came after that decision. If companies were charged with only providing quarterly profits, then there wouldn’t have been decades of corporate reinvestment and expansion, employee training and education, narrower exec-to-employee pay gaps, or any of the other things people seemed to love about pre-Reagan America.
None of these companies have a legal obligation to be shitty. They’re just incentivized because nobody says or does anything.
It’s even more depressing that it’s a conscious choice, and the exception is a company that wanted didn’t want to pay for birth control for their employees. But thank you for the correction.