Is double taxation “fair” to corporations and shareholders?

Corporations by law can't switch to non-cost-effective means, against shareholders?

• I saw this somewhere, and was wondering if it's a true statement: "The sad thing is that all fast foods (that are corporations, at least) are not ALLOWED to switch to healthy food if it is not cost-effective..... It's against the law." Looking for answers from people who actually understand the corporate laws, thanks.

• Answer:

  This is not true at least for two reasons. A fast food restaurant can change if the board of directors and senior management decide that their mission, or enterprise strategy should be to offer a healthy alternative to cheap greasy food. This kind of change is typified in "American Can Co" which was a can manufacturer, but completely changed its business twice and is now known as Citi - yes, the major bank acquired by Primerica, which grew from Music Land record stores, previously known as American Can Co. The other reason is, if the managers decided to go around the shareholders of the firm, the management could claim that they are being social stewards and are acting in the best interests of the company stakeholders AND still satisficing the stockholders' wealth. The precedent for this started with the 1919 Dodge v Ford Motor Co case where Henry Ford was sued for spending most of a two year windfall on building houses for employees. He was sued - successfully, for doing what you you suggested by the logic you have - he was not maximizing shareholder wealth. HOWEVER, as a result, most states in the US have enacted laws protecting managers from acting outside of the realm of pure profit maximization - for the reason that the firms may act as community members and not as value hogs within their environments. It may be challenged if the change damages the stockholders a lot, otherwise it is not "illegal" to make a change that is mildly less profitable.