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CHAPTER 2How Shareholder Primacy Gets Corporate Law Wrong

One of the most striking symptoms of how shareholder-primacy thinking has infected modern discussions of corporations is the way it has become routine for journalists, economists, and business observers to claim as undisputed fact that U.S. law legally obligates the directors of corporations to maximize shareholder wealth. Business reporters blithely assert that “the law states that the duty of a business’s directors is to maximize profits for shareholders.”28 Similarly, the editor of Business Ethics states that “courts continue to insist that maximizing returns to shareholders is the sole ...

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