Quote:
Originally Posted by Worldwalker
A corporation is not only expected but legally required to charge as much as possible while delivering as little as possible; individuals, of course, want to pay as little as possible and get as much as possible.
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Corporations are most definitely _NOT_ legally required to charge as much as possible (or the other magic phrase "maximize shareholder value").
I'm a direct shareholder (I hold stock in my own name -- not even through a broker) in a dozen companies and I can assure you few of their boards make decisions that result in maximizing what I (or the rest of the shareholders) can hope to be paid. Heck, these days, I don't even think they necessarily make decisions that are good for the long-term solvency of the companies they manage. I do think the companies I've invested in are the "least bad" of those publicly traded, but that's a different topic
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The landmark court case that's usually quoted as the source of "maximizing shareholder value" was "Dodge v. Ford Motor Company" (yes, that Dodge). The Dodge brothers owned stock in Ford and were planning on making use of dividend payments to start a rival car company. Henry Ford wanted to cut dividend payments and use the money to build more plants and employ more workers. His goal was to effectively turn the company into a giant work-based charity, and cut out the minority shareholders completely. The courts ruled that he was not allowed to turn a for-profit company into a for-employee charity.
Googling for "Dodge vs. Ford Motor Company" will turn up more reading on the topic, as will reading up on "Duty of Loyalty" and "Duty of Care" and the "Business Judgement Rule".