It really doesn't, at least in the legal sense. Managers have wide legal latitude to run the business as they think best. However, in practice corporate boards tend to vote the short-term numbers, which combined with decreasing CEO tenure is a strong incentive for CEOs to do short-term, exploitative things. That's not always the case, though. Bezos, for example, built Amazon to its juggernaut status by ignoring the short terms numbers and doing a lot of long-term investment with a focus on increasing customer value. It's only lately that it's turned to exploiting its customers as well.

No it bloody well does not. The "maximize shareholder value" thing has never been read that strictly by a court of law (otherwise, Apple would have been ripe for a suit when they told off an activist investor rep who was upset they were pursuing environmental goals at the expense of better ROI [1]).

Companies hollow out (or enshittify) their products because it is easy and because it guarantees results at least in the short term. There are other ways to grow, and they tend to require imagination and long-term planning. Don't blame the stock market for entirely voluntary choices of taking the easy way out.

[1]: https://arstechnica.com/gadgets/2014/03/at-apple-shareholder...

Regulations will catch up to it, maybe in 50 years. Look at cars, they started out as cobbled together death traps, but today they are very user friendly and safe (not the software, but the machinery). Those things didn't happen thanks to car companies being nice, but thanks to regulations.

This stupid meme needs to die.