Sole proprietor ≠ publicly held corporation
A sole proprietor can direct all his profits to whomever he wants, a publicly traded corporation has a fiduciary duty to the shareholders.
That's a distinction without a difference as far as I'm concerned. If I run my own corporation and control 100% of the shares, I think we would both agree that I can run it however I please. But if I control only 99.9% of the shares, I have to focus on profit maximization? I essentially control just as much of the company as I did before, and should retain 99.9% of the power over it.
You missed the part where the other shareholders had no say and that the board would not oppose Ford.
The shareholders could replace the Board with people who would oppose Ford, if they had a majority ownership. If they had no say because they didn't control a majority of the company, then that's no different than any other sour grapes from an election. If the majority of shareholders elect certain people to the Board, that's just the way it is...it doesn't matter whether the "majority of shareholders" is 1 person or 100,000 people.
Further Ford and his son breached their ethical duty and started a competing "Ford and Son" company, in which they took all the best employees, in order to gain total control over the shares.
That's a separate matter, and sounds like it might indeed be unethical. Although I don't know all the details of it.
He wanted public financing through shares but also wanted total control.
As long as he controlled a majority of the shares, he got to make a majority of the votes for the Board of Directors. If he was unwilling to relinquish a majority of the shares, any of the minority shareholders who had a problem with it were free to sell their stock at any time.
This isn't a limited partnership or any other type of partnership, but more of a trust.
The board are the trustees for the shareholders.
It is their job to make sure that the CEO/President is doing his job at managing the company, in order to maximize value for the shareholders.
While that is the most common arrangement, I disagree that it is necessarily the ONLY arrangement. If the shareholders want to elect people who promise that their sole duty will be to maximize value, so be it. If the shareholders want to elect people who promise something else (e.g. community responsibility, or taking care of employees, or lower prices for consumers), so be it. It really doesn't affect me how the owners of a business decide that the business' money should be spent. If I'm also an owner who disagrees with the will of the majority, I can sell my stock to someone else.
Sorry but what you're putting up here is that, there shouldn't be legal a duty to anyone and that's it's all up for grabs.
That's more of an anarchist mantra, than one that wants a legal system to prevent fraud.
Not at all. Any contracts should be enforced. I just question why there should be an implied contract that the company will always maximize shareholder profits. As far as I'm concerned, that's up to the shareholders (who elect the Board, which appoints the CEO) to decide for themselves.
The CEO is not supposed to control the board, otherwise there are no checks in place to prevent him/her from doing stupid ****.
The only way that a CEO can control the Board is if he controls a majority of the shares in the company (or at least close to a majority). And if that's the case, then I see no reason that there SHOULD be any checks in place to prevent him/her from doing stupid ****. Bad management is simply a risk that investors take, and if the majority of shareholders appoint bad management (or ARE the bad management themselves) then that's their own fault.
Just like Congress should not be controlled by the President.
Governments are not like corporations, in that you CHOSE to invest in the corporation and are free to sell your shares whenever you like. And in the sense that everyone's vote is (theoretically) equal in government, whereas your vote in a corporation is proportionate to your investment in it.
