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Where this comes from is the fact that companies have to act in the best interest of their shareholders. Best interest isn't defined in law. But it basically comes down to businesses can't act against their shareholders by intentionally helping the competition, or something like that. For example if the board members all own stock in a competing business, and they make a decision that will intentionally negatively effect the business in order to help the other company they hold interest in, that would be illegal.
But people mistakes that for businesses being required to maximize profits at all costs, which just isn't true
Also if the shareholders vote for policy X, the company cannot work against policy X or ignore policy X.
If your shareholders all get together and vote for some policy or program that will DEFINITELY hurt the stock value... well, the company still has to do it because it obeys the shareholders. And it has to try and do it the best possible way -- malicious compliance/bad faith can also potentially get you in trouble.
But since the majority shareholders in, frankly, most meaningful public companies are the likes of hedge funds, then the majority of votes are always going to be to do the thing that boosts share value. This inhuman corporate concepts simply cannot care about anything other than more dollars. On the rare occasion where they may try, it gets labeled as ESG wokism and they get threatened legally by conservative governors (at least in the US).
The real problem with shareholder capitalism may be the terrible influence of hedge funds and professional investors rather than the fundamental principle of the investor-based system. But the hedge fund and professional investor is also a kind of natural consequence of these systems.
This isn't really true. And is actually exactly what the law is meant to protect. The 51% owner isn't allowed to purposely tank the company and screw over the other 49% just because they vote.
It also has been unhelpful in the current arc that with unions being decimated (literally 1/10thed) in the last 60 years and wealth vastly concentrated (gee, wonder if there is a correlation?) it's allowed very few individuals with massive share interests essentially drive all decision to the "profits at all costs or I'll replace you and the board". As wealthy shareholder concentration has spread amongst industries and the wealth concentration snowball has picked up steam you now have a tiny portion of people holding some ungodly percentage of outstanding shares--even relative to other wealth in society.
Interestingly, with the rise of 401ks(crammed down throats of americans to subvert pensions), institutional shareholders (blackrock, vanguard, etc.) these mutual fund and index owners own a massive portion of outstanding wealth and actually have the abilty, should they be pushed to do so, to drive change on all these things. Surprisingly, they haven't stood up and done it and wealthy rats are scrambling to try to pass anti-activist shareholder rules. Remember, shareholder activists are only bad when it's the poors, otherwise it's a brilliant businessperson.