Corporations must operate in the interests of their shareholders but business judgment that directors may exercise is expansive, at least in the state of Delaware.

Meaning they can sponsor a little league team but most certainly can't raise wages, lower prices, and cut dividends (Ford v. Dodge). In turn, they can't go so far as to knowingly compromise safety in pursuit of saving a few bucks per unit (Grimshaw v. Ford).

> but most certainly can't raise wages, lower prices, and cut dividends (Ford v. Dodge)

Can you summarize this case? I don’t understand why corporations would be prevented from doing this. Couldn’t you always make the case that lowering prices or increasing wages are in the long term interest of shareholders, with the goal of increasing market share?

That said, it sounds like Henry Ford expressed that he wanted to hire more people, make up for lower prices with more volume, and invest in more plants, but seemed also motivated by cutting off dividend payments to the Dodge bros. Their payments had reached a megadollar a year, after initially putting in 10 kilobucks for 10%, and Ford correctly suspected they were using the payments to fund a rival car company. Courts ruled he couldn't cut off dividends so he bought everybody out.

> In turn, they can't go so far as to knowingly compromise safety in pursuit of saving a few bucks per unit (Grimshaw v. Ford).

Boeing execs that got away with negligence that killed people are laughing all the way to their golden toilets.

As GGC points out, Ford v. Dodge was about anticompetitive practices, not arbitrary increases to wages.

Companies are 100% free to double wages at random. It is possible shareholders will sue (“everything is securities fraud”), but that’s a dispute about whether the action was in the best interests of shareholders in the long term.

It remains 100% false that companies must maximize corporate profits, especially short term.

> it would be illegal for companies to do any philanthropy at all.

Most of philanthropy is free marketing with tax deductible spendings sadly. I.e. smart marketing and creative accounting, so they spend a little to gain much more in return.

Tax deductions are not tax credits. The company is still out of pocket money. Which, if this canard were true, would be illegal.

Philanthropy helps revenue by converting those actions into lower taxes for the companies that do philanthropy.

It is still about profits at the end of the day.

> Philanthropy helps revenue by converting those actions into lower taxes for the companies that do philanthropy.

This makes zero sense.

This is how a capitalist society works, regardless if it makes sense or not.

Revenue is income generated through business operations. Profit is what remains after deducting expenses from revenue. Taxes are paid on profit. Philanthropy reduces profit and thereby reduces taxes. Reducing taxes does not help revenue in any way.

Words play, what matters is that amount of money left in the bank to distribute among company owners.

> Words play

And when you use words incorrectly, you don't make any sense.

If the tax rate is 30% and I have 100 dollars in profit, I will have 70 dollars left in the bank. Instead, if I donate 10 dollars and write it off, I will still have to pay 27 dollars in taxes, leaving me with only 63 dollars.

So, it's not just about words. Your comment is fundamentally wrong.

Depending on the jurisdiction.

There are no jurisdiction with a >100% tax rate.

Sure, if you're talking about Narnia.

> what matters is that amount of money left in the bank to distribute among company owners.

It would still be lower with the philanthropy and tax deductions, rather than not doing the philanthropy and paying more taxes. You can never get a bigger tax reduction than the amount you're putting in. The only way that would be possible is if tax rates exceeded 100%.

Which is lower after philanthropic giving.

Depending on the jurisdiction.

Which jurisdictions give you $X back on your taxes if you donate $X to charitable organizations?

Philanthropy is a concept from a capitalist(-like) situation. If your government is taking everyone's stuff and redistributing it, you aren't being philanthropic.

That's the trick regarding public image, and actual intent.

The argument that companies must focus on profit and expansion to remain competitive is rooted in the principles of free markets and competition. In a capitalist system, businesses operate in an environment where they are constantly vying for customers and market share. If a company fails to prioritize profit and growth, it risks being out-competed by more aggressive and efficient competitors.

It has to be debunked and people need to stop using it because whenever its brought up, its never as a thought exercice or as a 90% thing. It's always brought up as the exact truth.

Swedish Aktienbolaget are actually required to maximise their profits, but not necessarily in the immediate term.