I really want to see a change to that fundamental shareholder law, that allows for things like:
A) A company is structured around a particular mission, which may have nothing to do with money in particular, just set up as a “shared goal”
B) Any profit motivations must acknowledge both short-term and long-term. If a company wants to replace their flour with sawdust, then a board member can readily explain this will likely lead to a long-term dropoff in customers and that such an action should be legally barred.
Case A is possible if the organization’s mission/goal is written in the organization’s charter. The mission has to be set at the organization’s founding, however. Changing the mission later is difficult or close to impossible. Note that such an organization might not be profit-oriented, and therefore might have difficulty finding investors, which means it will have a difficult time to start and operate in the world, because investors are typically looking for companies that return a profit at some point in the future. So, the difficulty is really more about finding investors than running a non-profit company. If you can find investors though, you’re golden.
Case B is technically already the case. The board of shareholders decides on the company’s strategy, and they can decide to favor long-term profit over short-term profits. The reason they often don’t do that is because in today’s world, there’s a lot of structural changes in the world around us all the time (think of all the technology that was developed in the last 50 years alone), and so it’s very difficult for a company to keep to a long-term plan at all, so they often make short-term plans instead, which leads to the short-sightedness that you already mentioned. If the world around us was more stable and provided more consistent operating conditions for companies for long-term planning, companies could rely on that and settle down on a long-term strategy. Which has simply not been the case in the last 50 years or so.
I really want to see a change to that fundamental shareholder law, that allows for things like:
A) A company is structured around a particular mission, which may have nothing to do with money in particular, just set up as a “shared goal”
B) Any profit motivations must acknowledge both short-term and long-term. If a company wants to replace their flour with sawdust, then a board member can readily explain this will likely lead to a long-term dropoff in customers and that such an action should be legally barred.
A and B are both technically already possible.
Case A is possible if the organization’s mission/goal is written in the organization’s charter. The mission has to be set at the organization’s founding, however. Changing the mission later is difficult or close to impossible. Note that such an organization might not be profit-oriented, and therefore might have difficulty finding investors, which means it will have a difficult time to start and operate in the world, because investors are typically looking for companies that return a profit at some point in the future. So, the difficulty is really more about finding investors than running a non-profit company. If you can find investors though, you’re golden.
Case B is technically already the case. The board of shareholders decides on the company’s strategy, and they can decide to favor long-term profit over short-term profits. The reason they often don’t do that is because in today’s world, there’s a lot of structural changes in the world around us all the time (think of all the technology that was developed in the last 50 years alone), and so it’s very difficult for a company to keep to a long-term plan at all, so they often make short-term plans instead, which leads to the short-sightedness that you already mentioned. If the world around us was more stable and provided more consistent operating conditions for companies for long-term planning, companies could rely on that and settle down on a long-term strategy. Which has simply not been the case in the last 50 years or so.