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The truth is that Loblaws is working as intended within capitalism. They need continuous profit. The CEO swears an oath to shareholders to prioritize profit quarter after quarter ad infinitum. Prices of everything will always increase, otherwise the investors bail and the house of cards collapses. No boycott is going to ultimately change that. They are always playing a game of: “How high can we increase prices today without people rioting?”
What may help is regulating how prices increase or maybe a crown corporation that isn’t driven by endless profit.
This is a myth. (Moreover, it’s an American myth.) People need to stop repeating it.
The linked article does nothing to characterize the “myth” you imply.
The article simply states that corporations have to represent the “best interests” of shareholders, that “shareholder value” is a common proxy, and that “value” can be many things because different shareholders have different values.
So, shareholders can tell companies to have a different mandate. Sure. That does not eliminate the default which is that the mandate is to make money. About the only default caveat is that it needs to be “sustainable” value which gives management flexibility to act with a longer term view when thinking about brand, reputation, supply-chain stability, employee relations, regulatory risks, legal risks, the environment, and other things that may not directly make money or even cost money in the short term.
All that said, if a company decides ( without direction from shareholders ) to reduce profits voluntarily, they should expect shareholder action in the form of non-confidence ( getting voted out of management ) or even legal action.
If shareholders have not communicated other “best interests”, their best interest is maximizing the value of the shares. That is almost always going to translate to maximizing profit.
I am not taking a moral position or preference on any of the above. Let’s just not be dishonest by suggesting that management obligations to maximize shareholder value is a “myth”. It is not.
Let’s just not be dishonest by suggesting that management obligations to maximize shareholder value is a “myth”. It is not.
Sure, in theory the shareholders could buy shares and insist that the company focus on something other than maximizing shareholder profit.
But in the real world, that’s so rare as to be effectively non-existent.
The core argument is that capitalism pushes for this outcome, which your link actually confirms. I also find it a bit odd to claim that “x is a myth” and link to an opinion piece article as if it’s a peer reviewed study.
It’s a link to an article about a legal case where the courts specifically stated this was not the case. In the legal realm, that is the equivalent of a peer review. And absolutely, unfettered capitalism pushes towards this outcome. That doesn’t make it a legal requirement.
Who said it was a legal requirement?
They need continuous profit. The CEO swears an oath to shareholders to prioritize profit quarter after quarter ad infinitum.
So root comment did.
Needs = laws?
They’ll oust a CEO who doesn’t fill that need. No legal action required.
Ah, I see you read the article. Now we’re back at the start and you can continue to go in circles without me.
Downvoting you because this is factually incorrect. They WANT the profit, but it’s not illegal to not make a certain amount of profit, that’s silly.
Who said it was illegal?
Every time this view point is parroted, they either imply or outright state the company will be sued/break the law because they didn’t do their best to make money. Notice how they used words like “need”, “swearing an oath”, etc. I’ve seen it time and time again on here and on Reddit, it’s tiresome at this point. The companies are just greedy, and know they can pretty much get away with stuff like this, end of story.
The shareholders will oust the CEO who doesn’t meet that need. No legal action required.
Maybe other people inaccurately say it is a law, but this is not an example of that. Especially since you said “FACTUALLY INCORRECT”.
No, no incorrect facts were stated.
Capitalism depends on proper competition to function “properly”. So of course the goal of every company is to reduce competition so that they can raise prices to infinity.
Loblaw’s still has competition, but it is not what it should be. There are a small number of big chains that don’t have proper competition in their best interests. If you live in a big city you likely have a few real options but often not really.
The capitalist’s answer to this is applying regulation since it has been required to prevent monopolistic behaviour. Or we can ditch capitalism as the model for our society. Or more likely both, one as a short term fix and another for the longer term.
Competitions are meant to be won. The fact that we keep talking about things not working due to a lack of competition points to it being a red herring. The point is to crown a winner, and winners are being crowned.
The problem is that the percentage of profits, not just revenue, as indicated by the 15% dividend raise, is increasing which means more is being scraped off the top by Loblaws which isn’t from input costs which Loblaws likes to blame but greed.
Revenue and share of profits should be should have steady growth commensurate to inflation at most for an essential service like Loblaws. Really government should treat housing, food, water and energy as essential with better regulation across the supply chain.