I think the situation in the US is very similar, and that it is common throughout the Western economies.
-IainB
From what I do know of UK law (which is admittedly not very much) I think there are vast differences between our two legal systems despite their surface resemblance and common ancestry.
In the United States, the
letter of the law holds sway. Some nod is given to judicial precedence and interpretation. But the bulk of our legal disputes revolve around an almost rabbinical level of debate on
exactly what each word in a statute means. There's a big difference between "should" and "must" in our legal system. (That's why you can ask the question: Exactly what do you mean by "had sex"? and get away with it.)
So when you are required to "act in the best interests of the shareholders" there's considerable room for interpretation and individual discretion in exactly how that is to be done. When disputes arise, it becomes a matter for the courts, with a the judge presiding over material issues of law - and a jury determining material issues of fact.
And in practice, the American judiciary has been extremely reluctant to micromanage businesses. Unless gross and callous disregard for statute or fiduciary responsibility can be clearly demonstrated in a court of law, even a director-level decision that costs a business significant money (or results in bankruptcy) will not be questioned too closely. To be blunt, "fucking up royally" is not, in and of itself, a tort or crime in the United States.
Investors have the right to demand a publicly owned company act in a
responsible and legal manner. They do not have an innate right to demand a certain level of performance (i.e. maximize profits at all times) unless they have negotiated a contractually binding agreement with the management of the company that they do so.
For the most part, courts have also frowned upon grass-roots activism when it comes to corporate governance. The feeling is if you are
that opposed to what the company is doing, you have two main options available to you. You can: force a proxy vote and replace the management - or - divest yourself of your investment in the company.
Shareholders are generally NOT allowed to directly interfere or intervene in the day to day operations of a business. (If they could, any competitor could buy up a block of shares in a rival business and completely disrupt it's operation.) Nor are they automatically guaranteed access to internal corporate documents or records for the same reason.
As an investor, you can go in and request to "inspect" the
pro forma financial statements and any other legally required (i.e. 10K, etc.) documents. But you wouldn't need to be given access to current
internal operating statements; or things like the secretary's raw (as opposed to official) minutes of a board meeting. Or internal memos or other communications. If you wanted those, and the company balked about showing them to you, you'd have to go to court and show reason why you should be allowed to see them. Simply owning some stock in the business would not be considered sufficient reason.
Corporate boards and director-level management are not usually held to specific standards of performance. Except maybe by shareholders. But that's a very different thing than being held to it by law. Otherwise most corporate directors would face the risk of prosecution any time they made a bad judgement call. With the result you wouldn't be able find anybody with an ounce of brains in their head willing to run a public company or sit on a corporate board.
There have been cases (civil) where some management has been called to book for poor performance. But in every case I'm aware of the complaints were either dismissed outright or resolved in favor of the accused. Because the law recognizes business is an
intrinsically risky activity. And as long as those engaged in it acted in a legal manner, and behaved as prudently and responsibly as the situation and their judgement allowed - there's no fault, liability, or foul on the part of the management.
And that's because there's no US law against being unlucky, not smart enough, prescient enough, or clever enough to be successful at business. It's all just part of the game. And a risk the operators and investors take.
But anyway...this is really going on too long for me (plus I'm getting tired of typing all this) so I'm gonna wrap it up and bow out of this whole debate. I will restate that I am not aware of any US law that either states in word (or strongly and unmistakeably implies) that US corporations are
required - as a matter of law - to
maximize profit as a condition of executing their fiduciary responsibilities to their shareholders.
I'll even go further and say such a law (or laws) flat-out doesn't exist in the United States.
And although many people (and some businesses) may interpret the legal requirement that management "represent and act in the best interests" of their shareholders as being the same thing as a requirement that profit be maximized at all times, this interpretation is erroneous. And is furthermore not recognized by US courts as being a valid interpretation, in theory or in fact.
So, if anybody can point me to a state or federal statute that specifically says otherwise - or can show a case where a corporate board or management team was
prosecuted solely because the profits they achieved were not in keeping with investor expectations, I'd be happy to read about it and modify my statements accordingly.
If there is such a law anywhere outside the United States I'd also be interested in hearing. Mostly because I'd want to make it a point never to conduct any business there.
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) and works just fine the way it is. I was, however, hoping I wouldn't have to install that lousy software Sansa gives you to access it's library functions. 
