Dodge isn’t the only business association case that makes me scratch my head. I’ve always thought Judge Andrews dissent in Meinhard v. Salmon was far more sensible (and in accord with common understandings) than Cardozo’s overwrought opinion.

1. On a day-to-day basis, even more important than what corporate directors believe to be the rules of the game is what corporate managers believe.

2. In my experience, your average American corporate manager, and possibly director too, is likely to believe that his or her company has a legal duty to maximize profits. And they are amazed when you tell them that this is not actually the law. But see 4 below.

3. The businesspeople who believe this sure don’t attribute it to Dodge. Most corporate managers wouldn’t know any court case from a hole in the wall. I would guess that most directors wouldn’t either, aside from a couple of Delaware ones like Revlon and maybe, maybe Van Gorkom.

Actually, after many years of practice in NYC, L.A. and Silicon Valley, even I hadn’t heard of Dodge until I started reading stuff by law professors as research for articles I was writing. The fact that Dodge is an old Michigan case is a rather potent element of any critique of the case, IMHO, unless you’re going to practice in that state. (I leave aside the question of whether a duty to maximize profits is the actual hodling of Dodge.)

4. For many managers, more salient than any legal duty to maximize profits is their belief that it’s their duty as a practical matter. They believe that otherwise the company’s share price will get hammered, or it won’t be “globally competitive”, or some other awful thing will result (like losing their job or missing out on a promotion). So if much corporate behavior follows the “norm,” it’s almost certainly not because of the “Dodge rule’s expressive function,” but rather managers’ fear of some adverse business result.