I KNEW THAT THE MAXIMIZING SHAREHOLDER WELFARE IS THE PRIMARY DUTY OF CORPORATE DIRECTORS, WITHOUT ANYONE EVER TELLING ME IN SO MANY WORDS
The law of corporations is one of the areas of law that is probably least understood by non-lawyers. So, a question of corporations law:
Q: What is the primary duty of the board of directors of a corporation?
A: To maximize shareholder welfare.
In other words, looking out for the interest of the shareholders of the corporation must come first. If the directors put any other interest before the interest of the shareholders, the directors are breaching their duty to the shareholders. Remember that the next time you read or hear about someone suggesting that a corporation should do something that is against the interest of the shareholders.
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