It gained popularity in corporate governance since then but it’s not a legal requirement it’s a shareholder preference. But that preference is violated all the time.
People often cite a 1919 era case from Henry ford because it has a pithy statement but the court in that case explicitly upheld many of the decisions Ford made that violated the principle.
That is, there is no law or precedent that requires corporate officers to only consider shareholders.
Legal defense instead of offense. IANAL, correct me please.
But to the point of this thread, there is no legal requirement that makes it so a boards fiduciary duty is in conflict with broader moral decisions, nor one that requires them to forget about their humanity when applying their duties as corporate officers.
If they are assholes, its because they are assholes, not because they are required to do so by their obligations to the corporation.
Considering the vast majority of US corporations are incorporated in Delaware, I think it's accurate to say most US companies only aim to maximize shareholder value.
"Fiduciary duty" is a duty to operate in good faith, without self-dealing, in whatever (1) you believe to be (2) the best interests of the company. Both (1) and (2) are totally subjective. You can believe the best interests of your company reside with employee welfare, or with customer satisfaction. You will not find a Delaware case that says otherwise.
So far as I know, the only time the actual value of a company's equity comes into the picture is if there are multiple competing offers to acquire the company.
In eBay vs Newmark: >Having chosen a for-profit corporate form, the craigslist directors are bound by the fiduciary duties and standards that accompany that form. Those standards include acting to promote the value of the corporation for the benefit of its stockholders. The “Inc.” after the company name has to mean at least that. Thus, I cannot accept as valid for the purposes of implementing the Rights Plan a corporate policy that specifically, clearly, and admittedly seeks not to maximize the economic value of a for-profit Delaware corporation for the benefit of its stockholders—no matter whether those stockholders are individuals of modest means or a corporate titan of online commerce.
https://courts.delaware.gov/Opinions/Download.aspx?id=143440
In the Trados case: >It is, of course, accepted that a corporation may take steps, such as giving charitable contributions or paying higher wages, that do not maximize profits currently. They may do so, however, because such activities are rationalized as producing greater profits over the long-term. Decisions of this nature benefit the corporation as a whole, and by increasing the value of the corporation, the directors increase the share of value available for the residual claimants. Judicial opinions therefore often refer to directors owing fiduciary duties ―to the corporation and its shareholders. This formulation captures the foundational relationship in which directors owe duties to the corporation for the ultimate benefit of the entity‘s residual claimants. Nevertheless, ―stockholders‘ best interest must always, within legal limits, be the end. Other constituencies may be considered only instrumentally to advance that end.
https://courts.delaware.gov/opinions/download.aspx?ID=193520
