This article is all about errors that a management team could make, but I'm talking about their intentions. Google's management team cannot intentionally pursue goals that are bad for shareholders.

I doubt that it would be legal to do so, but I'm not a lawyer, so suffice it to say that it's not practical because they would be removed from their management positions very quickly.

All you have to do is define "good for shareholders" in terms of setting up long-term growth (finding less-local optima). I feel like a lot of people here know that -- no one is going to be suing amazon over its very liberal return policy, because it keeps customers very happy. Yes it needs to end up being profitable, but not necessarily on a case-by-case basis. Some customers may end up being a net loss, but it's worth it for giving customers the overall feeling of safety in making a purchase from amazon.

Google actually explicitly put something like that in their IPO report ("focus on the user and all else will follow" as facebook helpfully brought up recently).

Now, Mark Zuckerberg also put similar statements in his letter to investors, and you could certainly make the case that these statements don't guarantee that the user will be put first, but investors have still been alerted that decisions they don't like may be made if they're deemed important for long term growth (google's voting shares scheme also helps in the regard).

For companies in general, though, the reality is that the judge will almost immediately throw these cases out unless there has been a major stumble (see, for instance, all the thrown out stupidity around demands for a documented and public Steve Jobs-succession plan). Even then you pretty much have to prove that the actions made were negligent without any kind of foreknowledge of how the market is going to behave. In other words, the only people that end up making money on these suits are the ones in cases where the company settles to avoid court time.

Point taken.

It just irks me that people often use the myth that they must maximise shareholder profits at all cost as a reason for why companies act evil. The Harvard Business Review article, that a still can't find unfortunately, also talked about how this myth is pervasive in management circles, and leads to bad business practices and corporations being socially unresponsible. I got the impression that you were insinuating this.

Could it be this article? http://hbr.org/2010/04/the-myth-of-shareholder-capitalism/ar...

I didnt read the article but I believe this is a state by state law, and some states use the term 'stakeholder' instead of 'shareholder'. A stake holder can be interpreted as anyone affected by the company's actions. If you live down the street from a manufacturing plant, you are a stakeholder because their emissions are going into the air you breath.