Making Choices for Money: Why Companies Focus on Making More (for kids)
In big companies that everyone can buy a piece of, there are grown-ups called boards. These grown-ups have a big job. Their job is to pick the things that make the most money for the company. Why? Because there are other grown-ups who give their money to the company. These grown-ups trust the board to make choices that help them get more money back.
The Big Rule: Doing What's Best
The grown-ups on the board follow a big rule called "fiduciary duty." This rule says they must pick things that help the company make lots of money. If they don't, the other grown-ups who gave money might get upset and say, "You didn't do your job!" So, the board must be careful and pick things that make the most money.
Trusting the Board and Laws
The grown-ups who gave money, like retirees saving for when they stop working, trust the board. If the board doesn't do a good job, there are rules that say the people who gave money can go to court. This is serious, and the board has to listen because breaking the rules means they can get in trouble.
Not Always Perfect
Even though the board tries hard, it's not always perfect. Sometimes, trying to make a lot of money can mean making choices that aren't so good for other things, like where people live or the air we breathe. This makes some people talk about if there should be different rules for companies to be fair to everyone.
Doing What's Right and Getting Money
The board has a tricky job. They need to choose things that help the company get money, but they also need to think about what's right for everyone. It's like trying to balance on a seesaw. Some people say the rules need to be better, so the board can make money and also do what's right for everyone.
The End of the Story
In the big story of companies and money, the board has a big job. They have to follow the rule to make money, but it's not always easy. Grown-ups trust them, and there are rules to make sure they do their job. But some people say we should talk about better rules so everyone can be happy and have what they need.
What are some rules you think grown ups should make to make sure everyone is given a fair chance knowing it won’t always equal a fair outcome?