Friday, September 12, 2008

The Fiduciary Duty

Now, I'm no expert in corporate law so I'd be glad to be corrected if anything I write here is complete rubbish.

It's my understanding that in the US, corporations are legally obliged to act in the best interest of their shareholders. This obviously translates as, "make as much profit as possible". I'm not sure if this is the case in the UK, but I came across this "Fiduciary Duty" and I'm mainly wondering whether shareholders could take their company to court and sue them for not acting in the best interest of their shareholders?

If this is the case, then surely Browns new energy package is illegal? If energy companies provide insulation to consumers, their energy bills will be lower and the company makes less money.

Tim Worstall
has a good post about why the whole thing won't work. I can't believe I forgot elasticity of demand! A-level economics was a long time ago....

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