A CEO’s duty

A CEO has the duty to abide by the company’s charter and, for a for-profit company, maximize the economic returns to the shareholders.  And comply with the law.

One high-flying CEO says that CEO’s must advocate for “all stakeholders,” including not only the shareholders but also the employees, the customers, community, and the government.  “Salesforce’s Marc Benioff Has Kicked Off New Era of Corporate Social Activism,” The Wall Street Journal, May 3, 2016 A1.

If indeed a CEO, in his or her role as CEO, has this obligation, what happens if he or she doesn’t fulfill it?  If the CEO’s duty to the shareholders isn’t paramount, what happens?  If a CEO elevates the government’s interests or the employees’s interest above those of the shareholders, does the CEO breach his or her duty to the shareholders?

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Filed under Business Case, Duty, Duty of Care, Employees, Governance, Investor relations, Management, New Implications, Protect assets

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