Stock market doesn’t work that way. You are legally required to grow, forever until the end of time (or your business). I think it’s one of the most toxic forces that leads to pollution, over-consolidation, etc.
As I understand it, corporations are not legally required to "grow, forever until the end of time", they are required to act in the interest of shareholders. Typically, that means returning value to shareholders of the company.
Growing the company is one way to achieve that. Other ways include paying out a share of the profit the company is making via a dividend or using share buybacks to reduce the number of outstanding shares.
There are plenty of examples of companies doing all of the above on various public exchanges. For example, utility companies often don't grow very much (if at all) but they do have consistent cash flow which they pay out as dividends.
> Don’t utilities grow as we generally consume more and more resources?
Yes, you are correct. Most utility companies do grow to some extent, just very slowly. You also have to compare the rate that they grow against other metrics like GDP. If a company is growing slower than GDP you could make an argument that they're actually shrinking.
> In the Caden of dividends, wouldn’t they also need to increase over time to act in the best interest of shareholders?
Yup. In theory, if a company does not grow sales at all then their dividend should be able to grow at the same rate as inflation. Most companies do grow sales to some extent and thus are able to grow their dividend more than inflation.
For example, Coca-Kola has grown their dividend on average 7.46% per year. AT&T on the other hand has only grown theirs 2.26% per year which is closer to inflation.
The first statement is true. The second sort of misses the point. "Fiduciary duty" isn't a moral obligation or a social norm, it's a darwinian thing.
Publicly traded companies are controlled by whoever wants to buy them. If a company has assets that could produce a profit of $N, but it's currently not doing so and only making $M (and its share price reflects the lower revenue), it will be in someone's interest to buy the company and rework its priorities so it makes them more money.
So... the grandparent was effectively right. Over time, all public entities will act to maximize profit.
I was going to point out that you're missing (or intentionally ignoring) the very next piece in that debate series[1] linked at the bottom of your link, which takes the view that this requirement doesn't exist. But it's not a very good-quality piece, which is presumably a function of the article format (short-form debate aimed at unsophisticated readers).
The flipside of that is that I don't think your original linked piece makes much of a case at all either.
“Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”
We aren’t talking about corporations, but rather publicly traded companies. As the previous article pointed out you do have an obligation to your shareholders, and that obligation is to somehow act in their best interest.
Certainly the stock market price goes down if you aren’t growing. And prices going down means you’re not doing right by your shareholders.
I’m happy to be wrong here (I hope it’s true) but whether law or not it seems to be an immutable force.
I don’t think fiduciary duty is the right word for it. But there is some Supreme Court ruling (dodge bros. Vs Ford?) that seems to imply (or so people interpret) you need to make money for share holders.
I don’t think that’s actually true. Your original statement. The duty is just to behave how a reasonable or prudent person would behave. I doubt there would be a lawsuit case against Craigslist that would win if Craigslist was a public company.