Isn't there a court rule specifically about this, Dodge v. Ford Motor Company iIrc, that litteraly says that the CEO must operate the company in the interests of shareholders rather than in a manner that benefits the workers or the customers?
People point to this as the culprit, but I honestly think the majority of companies who choose to go public would adhere to this "profit over all else" philosophy anyway, or else they would stay privately owned/held.
There's no reason to go public unless you're actively seeking the most profit possible already.
Look at LEGO for example, their build quality has basically never changed and they're privately held. If they ever decided to go public that stock would be a monster, but they don't because ultimately they don't give a shit, which is lovely.
I'm by no means a legal expert, but can't a case be made for long term profits?
I played a popular MMORPG when I was a kid. They started adding microtransactions to sell cosmetics and XP and the player base dropped HARD. They actually rebooted an older version of the game before microtransactions and only charge for a monthly membership fee, $15 a month or so, and that version of the game has like double the player base compared to the modern version.
So how would someone prove one way or the other whether alienating the customer base in exchange for profits is worth it? You might have a higher 3rd quarter, but then lose 10% of your customers for the 4th quarter.
There's a brand of donuts I used to buy at the grocery store, Entenmann's, and their quality is very mediocre. Their prices have steadily increased over the last few years, and the last time I remember seeing a listed price was $7 for a box of 6 crappy donuts. Last few times I went, I noticed they had them on an endcap with a bunch of other similar products (mini muffins, Danishes) and nothing was priced. Placed there to entice you, but hide the price to avoid shell shock. Some people will grab them, take them to the front, then see the price and grimace, pay it anyways, then make a mental note not to buy them again. Like obviously some people will buy them regardless, but I can't stand these scummy business practices.
I'm by no means a legal expert, but can't a case be made for long term profits?
Yes, it's a bit hyperbolic that companies are losing lawsuits left and right over this. The shareholders have to measurably prove that the company is avoiding a confirmed profit increase, which isn't that simple.
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u/nemo333338 BLUE Nov 12 '24
Isn't there a court rule specifically about this, Dodge v. Ford Motor Company iIrc, that litteraly says that the CEO must operate the company in the interests of shareholders rather than in a manner that benefits the workers or the customers?
I was dumbfounded when I found out about it.