Here's how I would edit the first two paragraphs of the Wikipedia entry on Dodge:
The edited version would read:
Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668 (Mich. 1919), is a case in which the Michigan Supreme Court held that Henry Ford had to operate the Ford Motor Company in the interests of its shareholders, rather than in a charitable manner for the benefit of his employees or customers. It is often correctly cited as affirming the principle of "shareholder primacy" in corporate America.[1] At the same time, the case affirmed the business judgment rule, leaving Ford an extremely wide latitude about how to run the company.
Despite a few subsequent opinions purporting to authorize corporate directors to pursue socially responsible courses of action,[2] the general rule of law today is that directors have an obligation “to attempt, within the law, to maximize the long-run interests of the corporation's stockholders” and, moreover, “that they may sometimes do so ‘at the expense’ of” other corporate constituencies.”[3] Having said that, however, management decisions will not be challenged where one can point to any rational link to benefiting the corporation’s shareholders.[4]
Here is how I would edit the paragraph under the “Judgment” subhead.
The Michigan Supreme Court held that Henry Ford could not conduct a for profit corporation as though it were an "eleemosynary institution.”
Notably, the opinion written by Russell C. Ostrander argued that the profits to the stockholders should be the primary concern for the company directors. Because this company was in business for profit, Ford could not turn it into a charity. This was compared to a spoliation of the company's assets. The court therefore upheld the order of the trial court requiring that directors declare an extra dividend of $19.3 million. It said the following:
A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the non-distribution of profits among stockholders in order to devote them to other purposes...
Although some commentators have argued that that statement is mere dicta,[5] scholarship contemporaneous with the Dodge decision recognized it as holding.
[1] See Stephen M. Bainbridge, Making Sense of the Business Roundtable's Reversal on Corporate Purpose, 46 J. Corp. L. 285, 292 (2021) (“Dodge was a logical extension of legal trends of the time and was accepted almost immediately by both judges and scholars as a correct statement of the law of corporate purpose.”)
[2] See, e.g., AP Smith Mfg. Co. v. Barlow, 98 A. 2d 581 (N.J. 1953).
[3] Katz v. Oak Indus. Inc., 508 A.2d 873, 879 (Del. Ch. 1986).
[4] Revlon, Inc. v. MacAndrews & Forbes Holdings, Inc., 506 A.2d 173, 182 (Del. 1986).
[5] Jeffrey M. Lipshaw, The False Dichotomy of Corporate Governance Platitudes, 46 J. Corp. L. 345, 346, 365-68 (2021).
