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As to which company to invest in I think it is governed by what your risk expectations are.
That is not your question though which I believe is whether a company has some greater obligation to factors other than the highest return to its shareholders. Even if you took the strict view that the company's obligation is to return the maximum value to shareholders there would still be some limit on the company's activities. For example, saving money by using a cheaper but potentially more faulty brake system design may make more money for an auto company short term but long term may hurt the company's long term profits as customer may avoid their cars. Does management have a greater duty to the short term holder over the longer term investor? Moving jobs to the third world may save salary expenses short term but in a politically unsettled third world could be more risky and lead to greater costs in the long run. While the bank is free to move those jobs off shore my point was that (i) the rationale (money savings) seemed flawed based on the conversations I had with some of our IT people and (2) the government was in a strong position after the bail out to wrangle from these banks some type of commitment to maintain employment in the US and did not do so. That was an opportunity lost.
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