> They are required to do what the shareholders want, which is usually maximizing returns.
I know of no such law. In which country is the the law?
In fact there is some concern by some economists that the management of public firms have too much discretion as unhappy shareholders can simply sell their shares and invest elsewhere rather than provide any direct feedback. Even when direct feedback is provided, management can and usually does ignore it, as can be seen from this week's Amazon AGM.
All that respect private property. The shareholders own the company, the management is essentially their employees.
The shareholders may not micromanage their company, but still management's job is to further the aims of the shareholders just as the job of elected politicians in a representative democracy is to further the aims of the people. Otherwise they get fired.
While this may not be working as well as it should, you wouldn't say a law is not the law because enforcement is spotty either.
Probably, if I spent the time. But then again, the fact that the owners of a company choose its management might be so obvious no lawmaker ever bothered to write it down.
I know of no such law. In which country is the the law?
In fact there is some concern by some economists that the management of public firms have too much discretion as unhappy shareholders can simply sell their shares and invest elsewhere rather than provide any direct feedback. Even when direct feedback is provided, management can and usually does ignore it, as can be seen from this week's Amazon AGM.