Google went public is what happened. You literally cannot make good decisions when you have to base everything around what will make the most profit for the shareholders this quarter.
As far as I know the only duty a company has towards shareholders is "protect them" (aka: don't mess up and make money). As long as the company eventually does that there is no issue. Even if it takes 8 quarters to become profitable (or 10+ years, see Amazon).
There are probably ways in which shareholders can get together and request something (in court?), but that almost never happens? Maybe I'm wrong. If so, would love to see examples.
These days the vast majority of executive comp is in stock - imagine if bad optics could force you to take a 60% pay cut, you'd be pretty conservative with your choices.
If a too good offer comes by, for instance, for one to buy Google:
the offer has to be disclosed; and regardless if the founders like it or not -- or what the voting majority says, there is a price where the remaining shareholders can force Google to be sold.
If too many of them do, the stock goes down, and essentially everyone at the company (especially the executives) take a pay cut. The executives aren't even just thinking about their own pay. The entire company's ability to attract and retain talent depends on the stock price going up.
1. Duty of Care
2. Duty of Loyalty
3. Duty of Disclosure
4. Duty of Confidentiality
5. Duty of Prudence
6. Duty of Good Faith
You can start looking at this rabbit hole here (and it is a rabbit hole): https://www.law.cornell.edu/wex/fiduciary_duty
P.S. Just a (fly-by)comment; not advice of any short or kind -- either investment or legal. P.S.2 Oh it does happen that share/stake holders seek enforcement for breach of fiduciary duties. I would say it is quite common.
just because it's a US tech-world cultural norm for companies to mostly be run in fucking stupid short term ways, it doesn't mean it's actually required. especially in the case of Google, where 1) Eric, Larry and Sergey have stiched up the entire board's voting power, 2) doesn't need to raise cash via bonds or stock at all and 3) it's a magic money tree, so investors will accept being told to fuck off and let the CEO run the company however they think it'll work best.
Google also IPOed in 2004...are you seriously suggesting that it hasn't been a
> forward thinking and innovative company
for ... 19 years? that's a pretty bold take.
* As a larger ownership moves towards investors, decisions are made that sacrifice the special sauce in order to increase returns.
* Appeasing general investors leads towards enshittification.
Sometimes a strong leader (Jobs, Cook) can keep the investor class as bay for a period. Sometimes leadership can be consolidated for long periods of time to delay the process (Walton, Zuck), but it feels inevitable after IPO.
Entropy forces new relative perspective. Humans need to do better about accepting figurative and literal death and chill. There quite literally is nowhere else to go except insane from repeating ourselves.
A rewrite of philosophical priority is a necessity for anyone under 50 and the species. That has to be taken sincerely and seriously because, well they kind of outnumber the ossified pensioner, and if they’re staring down forced obligation to choke on fire smoke for 60 years or dump gramps overboard, no one around to see it happen will be around long enough to insure it’s a footnote in any discussion of history.
Self proclaimed STEM minded secular people seem just fine ignoring evidence that does not fit the civic life narrative they’ve been spoon fed like it’s immutable truth. Seems to have latched itself onto whatever quirk of biology religion accidentally exploited; like a nihilism cause it’s all gods plan kind of woo.
“Hey look at me, mom! My life goal is making computers do what they were intentionally designed to do!”
That can be automated; any acceptable experience is a finite set of constraints. DOOM is pretty DOOMy. Same for Halo. Email clients. But hey we have figurative career ambitions, man; Google Fellow! Boom goes the dynamite.
Smaller models first; let’s make an AI to replace the CEO by assigning project management to vetted candidates via publicly audited randomizer. Term limits for geniuses who always seem to end up enjoying their own farts.
“I’m sorry general manager of capital intense AI infrastructure, you are tonight’s… weakest link! dropped into literal shark tank”
It’s been a long day. Sorry not sorry for the more unhinged off gassing.
Ironically, Google doesn't care about their shareholders and quarters like other tech companies. They don't provide a guidance, their earnings calls have little substance, and their disclosure is atrocious.
https://www.nytimes.com/roomfordebate/2015/04/16/what-are-co...
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."
Despite contrary claims by some academics and Occupy Wall Street-type partisans, this remains the law today. A 2010 decision, for example, eBay Domestic Holdings Inc. v. Newmark, held that corporate directors are bound by "fiduciary duties and standards" which include "acting to promote the value of the corporation for the benefit of its stockholders."