This question is one that isn&#x27;t asked. And if it is, history&#x27;s rewritten to make sure it wasn&#x27;t asked.<p>1) any employee who asks runs a good risk of getting fired, so they don&#x27;t ask. If anyone is crazy enough to do so, what I&#x27;ve seen happen is this : everybody immediately looks at the guy asking, wondering if he&#x27;ll get his head lobbed off. Everything goes very, very quiet. Management moves to the next question as if nothing happened. The guy is never heard from again.<p>2) any shareholder who asks approved the stupidity (this, of course, doesn&#x27;t stop them from blaming others, but generally not publicly).<p>3) the big shareholders, who make the decisions, control who can film the shareholders meeting and who can report on it, and they make sure reporters who get to enter agree beforehand on what questions to ask. This means that if you go to a shareholder meeting of a large company, you&#x27;ll see that question asked, and usually it turns the whole meeting into a shouting match (and once, I&#x27;ve seen it turn into an actual fight). Then the next day you open the newspaper or online sites and read a reporter describing a serene and cool meeting echoing almost exactly the press release of the earnings.<p>Management of long-running companies is stupid. Management that just left long-running companies is stupid. Well, perhaps stupid isn&#x27;t the right word, but they&#x27;re looking for very specific outcomes, which don&#x27;t usually have anything to do with running the business well. Poking holes in how they&#x27;re running things is easy, because people who do the hole poking are looking at the interests of the business itself, not of the people investing in it (they may want an exit, or even an entry : they want to buy extra shares, so it&#x27;d be real helpful if a &quot;medium-size&quot; business disaster happened).<p>And why not hire smarter management ? Senior management isn&#x27;t hired (in most cases). They buy themselves in, then get to write the &quot;reason&quot; they get hired. It&#x27;s never that they paid good money (usually in the form of shares, so technically they loan money to the business). Note that senior managers often don&#x27;t use their own money to do this, but money of people they represent. Very often risky bank loans come with the string that a board seat and a C-level position must be given to a &quot;to be named&quot; individual.<p>(If you&#x27;re working for a startup that got a bank loan and a sudden &quot;weird&quot; executive, I guarantee you this is what&#x27;s going on. Same for investments. A good thing is that companies like Andreesen Horowitz are pretty forthcoming with that this is a requirement)<p>So the purpose of management generally isn&#x27;t to run the business. It&#x27;s to make the balance sheet look good for the duration of his investment. Making sure a loan is repaid at all costs. Making sure their company gets a good opportunity to buy shares (ie. break out news that kills the stock price, then sudden takeover happens, or at least gets closer)<p>Also, keep in mind hiring is partly done because open job openings that change regularly is something a lot of investors look at. This is one of the value-investing tricks in the category of tricks that everyone knows about. So it is gamed.<p>Not every company is running like this of course, but as a general rule, any company older than perhaps 20 years is. Or, more generally, any company whose stock has at some point really stalled is run like this. It&#x27;d be more accurate to say that any company that ever needed a bigger loan than their rating would justify is, but that&#x27;s a very tough call to make.<p>Read this for an especially egregious example, bordering on fraud (but it isn&#x27;t fraud. They never lied about the numbers, they just changed them so people who don&#x27;t dig deep would see a huge improvement that wasn&#x27;t real ...) <a href="https:&#x2F;&#x2F;foragerfunds.com&#x2F;bristlemouth&#x2F;dick-smith-is-the-greatest-private-equity-heist-of-all-time&#x2F;" rel="nofollow">https:&#x2F;&#x2F;foragerfunds.com&#x2F;bristlemouth&#x2F;dick-smith-is-the-grea...</a>