Item — HN Reader

Literally, you are kinda correct about Dodge. Practically, not so much. The court's judgement quite effectively ordered to Ford to abandon his rather pro-social plan, the keystone of which was dramatic corporate growth, in favor of giving his minority shareholders a big hunk of the money (needed for that plan) ASAP.

The difference between that decision and "Don't be Good" is that if you have zero greedy shareholders, or are ready for a protracted and uncertain legal battle against them, then you might get away with being good. Otherwise - make sure any seeming good you do is some combination of de minimis and trivial to defend as a tactic to maximize shareholder profits.

(Hobby Lobby is a decision about about closely-held and privately-held corporations, when they are claiming strong religious reasons for policies which a majority of the Supreme Count Justices have very obvious ideological reasons to favor. And also have both the motive and resources to spends years fighting through the Federal Court System. The relevance to 99.99% of the decisions made by corporations is very close to nill.)

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Dodge was in 1919, and shareholder primacy didn't really get going until the late-1970s or early-1980s:

* https://en.wikipedia.org/wiki/Friedman_doctrine

So there's several decades between the two where it wasn't really a thing. The late Lynn Stout (amongst others) has written extensively on this:

> The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public (Berrett Keohler Publications, 2012) challenges the ideology of shareholder value. Part I, “Debunking the Shareholder Value Myth,” traces the intellectual origins of shareholder-primacy thinking. It shows how the ideology of shareholder value maximization lacks any solid foundation in corporate law, corporate economics, or the empirical evidence. Contrary to what many believe, U.S. corporate law does not impose any enforceable legal duty on corporate directors or executives of public corporations to maximize profits or share price. The economic case for shareholder-value maximization similarly rests on incorrect factual claims about the structure of corporations, including the mistaken claims that shareholders “own” corporations, that they have the only residual claim on the firm’s profits, and that they are principals who hire and control directors to act as their agents. Finally, there is a notable lack of persuasive empirical evidence demonstrating that individual corporations run according to the principles of shareholder value maximization perform better over time than those that are not. Worse, when we look at macroeconomic data—overall investment returns, numbers of firms choosing to go or remain public, relative economic performance of “shareholder-friendly” jurisdictions—it suggests shareholder value dogma may be economically counterproductive. Part I concludes shareholder-value ideology is based on wishful thinking, not reality. As a theory of corporate purpose, it is poised for intellectual collapse.

* https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v...

Managerialism, which was the predominant theory before Friedman kind of took over, seemed to do relatively well:

> The system was hardly perfect.11 But the proof of the pudding is thetasting. Judged by that standard, managerial capitalism seemed to generate good results. American corporations dominated the global economy, producing innovative products for their consumers, secure jobs for their employees, and corporate tax revenues for their government. And-especially notable-they produced outstanding investment results for public shareholders. Between 1933 and 1976 (a period that includes the infamous bear market of 1973-1974),12 shareholders who invested in the S&P 500 enjoyed inflation-adjusted compound average annual returns of 7.5%. 13This compares very favorably indeed with the sorts of returns shareholders have received more recently.14

* https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?arti...

There have been multiple ideas about the purpose and responsibility of corporations and their management over the decades, all under the same legal regime.

Further, even talking about "shareholders" brings up issues: what is meant by "shareholder"? The pension fund that wants steady dividend payments for 3 decades? The hedge fund that wants a meteoric rise in share prices in 3 years? The day trader that's trying to cash in on a meme in 3 days? There is no (single) Platonic "shareholder" that a company's directors can aim to be best at: there are a variety of people holding stock for different reasons. See concept of "shareholder heterogeneity".

Was John Sculley doing the right thing by going for maximum profits and shares prices when he was CEO of Apple (and kicked Steve Jobs out)? How that'd work out for AAPL in the 1990s? How has focusing on financials gone for Boeing (since they bought out McDonnel–Douglas)? How did all the stuff that Jack Welch did at GE work out?