"Dodge v. Ford is one (of) corporate law’s iconic decisions, regularly taught in law school and regularly cited as one of corporate law’s core shareholder primacy decisions. Ford Motor slashed its dividend in 1916 and minority stockholders—the Dodge brothers—successfully sued Ford Motor Company for a big dividend payout. Ford had justified skipping the dividend because he sought to do well for employees and America’s car buyers, with corporate profits a secondary motivation. The court largely rejected Ford’s justifications for holding back the dividend."
https://corpgov.law.harvard.edu/2021/12/01/dodge-v-ford-what-happened-and-why/
"This ruling is still taught in law schools and debated today, influencing corporate governance by creating a legal framework that can be used to justify decisions like wage suppression or offshoring, while also being debated in the context of modern corporate social responsibility and stakeholder theory...The case famously stated that the 'purpose of a corporation is to make money for its shareholders.' This principle has since been used to argue that corporate managers are legally obligated to prioritize the financial interests of stockholders over other considerations."
"The decision has had a profound, long-lasting impact on how corporate governance is understood, even if its practical application is debated. Critics argue it has been used to justify actions that harm employees and communities, while supporters point to the complexity of the original decision and the flexibility directors have in making business judgments...The ruling continues to be a central point of discussion in debates about the purpose of corporations...Some interpretations of the ruling argue it has been used to support actions that put shareholder profits ahead of worker welfare, such as wage suppression or moving jobs overseas."
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