As far as I'm concerned the corporation's only legal obligations to its shareholders should be whatever they say they are. So if the CEO wants to tell the shareholders "I promise to maximize your profits," that's fine. If the CEO wants to tell the shareholders "I promise to maximize value to the consumers and employees, and give you the leftover profits," that's fine too. If they're unhappy they can take their money elsewhere or replace the CEO.If he has control over, the board of directors, the CEO/presidency and has the largest amount of shares, the conflict of interest can compromise his fiduciary duty to the shareholders.
He has a legal obligation to shareholders, which they can sue to protect.
I disagree. If I owned a company and offered you a 1% stake in it (with the understanding that I'd still be making all decisions about where the company's money goes, since I control 99% of the stock), what are my obligations to you? We agreed that I'd be making all the decisions, so if I want to give the profits to charity instead of paying dividends to both of us, that's not a breach of contract as far as I'm concerned. Dissatisfaction with the way a company is managed is simply a risk that shareholders take with ANY investment.Edit: It's not his business, he has no right to direct it towards his personal wants, ignoring the other investors.
Most corporate charters have regular elections for the Board of Directors (not sure if it's legally required), so chances are he couldn't have simply prevented a vote. And if they didn't have elections, well, then the dissatisfied shareholders can sell their shares.And if he decided to not let that come up for a vote?
Any major shareholder has significant control over the Board. That isn't inherently a problem. All else being equal, I'd much rather invest in a company where the CEO owned 51% of the stock (and therefore had significant control over the Board), than a company where the CEO owned 1% of the stock.He also had significant control of the Board.
That's the problem.