Yes, that's absolutely true if you decide to remain a private company. Your obligations change once you decide to go public - pros and cons.

Actually, these obligations apply to private corporations as well as public corporations. It's just that the chance of a shareholder suit is much higher in a public company.

>Aren't you obligated to make the highest returns for shareholders?

Actually no. As recently as Burwell v Hobby Lobby, the Supreme Court said:

"Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not."

http://caselaw.findlaw.com/us-supreme-court/13-354.html

Point taken. I should be more exact: is maximising shareholder return a higher priority than maximising shareholder input?

That's a meaningless goal without a specific time frame. And of course, the moment you do specify a time frame, you also define the range of what you'll actually do in ways that flatly contradict what you'd do with different timelines.

For example, if you're trying to maximize cash on hand in the very short term, you simply stop paying your bills and declare bankruptcy when creditors attack. But if your goals are further out, this becomes the exact wrong strategy. Whatever your goal may be, you need a time frame to determine what is and isn't a good use of resources in realizing it.

Conversely, anyone who says "maximize shareholder value" without specifying a time frame is either a fool or a grifter. You can imagine how well things go when these types get together and "agree" on something this dangerously unbounded as a fundamental operating principle.

You get a lot of leeway. There is basically a rebuttable presumption you are acting in the companies best interest. But I wonder if that presumption should be weakened in the cases where the CEO has dictatorial powers over the company without a corresponding share of equity.

Even if you own a majority of voting shares, it's a basic principle of corporate law that you still have to treat shareholders equally, you still have to act in a way to maximize shareholder value, and you still have to consult the board & shareholders on the same issues. Owning 51% of voting shares doesn't turn the company into your private fiefdom.

There are specific laws to protect rights beyond the realms of "speed".

Apply your line of thought to democracy and you'll see what's the problem.

The comparison to democracy is a red herring. Facebook isn't a government, it's a company.

If you want an accurate government analogy, look at the military: it has to move fast to succeed. You only run a war by committee if you want to lose.

Why even have an analogy. There is a perfect Example of Michael Dell wanting more control, and getting together with others to buy dell back, and its no longer publicly traded. They can not have to worry about shareholders, when the (for example) decide to buy EMC..

And if you want to run a company without having to deal with shareholders you can stay privately held.

I used an analogy to simply demonstrate every entity (e.g. government, corporation, military,etc) must follow specific rules while making decisions.

Go radically against these and chaos will erupt. It's both unintelligent and ideological to take speed as an absolute.