Private firms have no legal duty to maximise profit

Salisbury describes the mood of cautious optimism in general practice with Wes Streeting as the new health and social care secretary; she concludes with the hope that someone will remind him that “companies with a duty to maximise their return to shareholders can’t legally prioritise patient care.”1This is a common myth often promulgated by those who want to demonise any private enterprise in any form. It isn’t true as a statement of the law in the United Kingdom or the United States. As Jeroen Veldman said in a University of Oxford law blog in 2016: “Contrary to widespread belief, corporate directors are generally not under any legal obligation to maximise profits for their shareholders.”2 John Kay, the leading economist, was tired of hearing this false claim, saying in a column in the Financial Times: “I have lost count of the number of times I have been told ‘that is the…
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