Businesses are required by law to do what is most profitable for their shareholders. So when businesses push stuff most people don't want, why don't their shareholders sue?

submitted by newguy from self.whatever

Shareholders of public companies can sue if they think the company is not acting in the interest of profit. This is long-established corporate law.

So when these companies like Target and Budlight push very unpopular ideas that basically implodes their brand, why aren't the shareholders suing for the lost profit that is occurring because the leaders of the companies are using the companies to push politics, instead of generate the most profit?

Seriously, why is no one suing?

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[–]Musky 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (0 children)

They do sue sometimes. Usually it's pension funds bringing the lawsuits.

[–][deleted] 4 insightful - 1 fun4 insightful - 0 fun5 insightful - 1 fun -  (0 children)

Because the board has formally agreed to adopt ESG? I'm just guessing.

[–][deleted]  (2 children)

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    [–]newguy[S] 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (1 child)

    I guess most people do have mutual funds or 401ks that are through vanguard or blackrock.

    But surely there must be some companies where there's enough individual shareholders that could group together and file a class action lawsuit? I don't even think it would require a majority of shareholders or anything. Just enough that are mad that they're imploding the brand, because in a lot of cases they are.

    Even just a court case that brings the ESG credit ratings fiasco to the supreme court would be a big win for awareness

    [–]Chipit 3 insightful - 1 fun3 insightful - 0 fun4 insightful - 1 fun -  (0 children)

    Individual investors sue companies all the time. They lose all the time. Legalism only works if you can outspend the other party, and even then it's a roll of the dice.

    [–][deleted]  (1 child)

    [deleted]

      [–]Dragonerne 2 insightful - 1 fun2 insightful - 0 fun3 insightful - 1 fun -  (0 children)

      Yes, they are. It is common law, because jews sued Henry Ford, when he wanted to use the profits to raise the wage of his workers. This was absolutely unacceptable to the jews, so they sued him and they won, making it law that companies have to act in the interest of shareholders.

      [–]Brewdabier 1 insightful - 1 fun1 insightful - 0 fun2 insightful - 1 fun -  (0 children)

      I did a quick search and no Businesses are NOT required by law to do what is most profitable for their shareholders, If im wrong then provide a credible link stating this fact.