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  • Robert Hinkley

A Call For Help

Photo by Richard Miller

By Robert C. Hinkley 7 August 2023

New laws are usually passed to prohibit behaviour by some that severely harms others, the environment, or our communities. Containing harm in this manner is one way democracy preserves the public interest and provides security to its citizens. What if, instead, there was a law that encouraged harmful behaviour to continue? Wouldn’t that be absurd? Wouldn’t you want it changed?

Businesspeople don’t start a new business knowing it will harm the public interest. Advances in science or society recognize the harm only after the business has proved successful and millions, sometimes billions, are invested.

Here is where the corporate law lets us down. It dictates that directors, the people in charge of the company, must always act in the company’s (and its shareholders’) best interests—even when doing so will continue to severely harm the public.

Requiring the people in charge to work for the benefit of the company makes capitalism work. When investors put their money in a corporation, they want to know that it’s going to be used to enhance their investment.

However, total subservience to company (and shareholder) interests isn’t necessary or desirable. Serving the company’s interests should have limits. It should be restricted to situations where it doesn’t cause severe damage.

When businesses are discovered harming the public interest, the law shouldn’t encourage directors to defend their company’s anti-social behaviour. Rather, it should require them to eliminate any severe harm and encourage them to reduce all harm.

Current law is the reason corporate anti-social behaviour continues. Legislatures may try to pass bills that restrict the damage, but corporate lobbyists, under the direction of management, do what they can to delay or frustrate those bills and allow their companies to continue.

A debate ensues about what is more important, the public interest or the economy. This debate can go on for years while the public interest continues to be destroyed.

But, for the moment, let’s consider just the environment. Wilful corporate destruction of the environment should be unacceptable to every citizen. We wouldn’t allow another human being to get away with it. Why should we let big companies?

No corporation should be allowed to pursue its own interest at the expense of severe damage to the environment. The law should be changed to inform directors that, when they discover their company is causing severe harm, they have a duty to protect the public interest that takes precedence over their duty to serve their company and its shareholders. Directors should be required to stop the harm, even if it requires stopping the business.

The way to turn this concept into law is simple. Add eleven words to the duty of directors in the corporate law “to act in the best interests of the corporation,”

  • “but not at the expense of severe damage to the environment.”

These words should be included in the corporate law of every nation or state under which corporations are formed.

Every politician running for office in a jurisdiction which has a corporate law should be required to disclose to voters whether he or she supports requiring corporate directors to protect the environment from severe harm.

This effort is just beginning. I’m interested in hearing from non-governmental organisations and individuals who can help put the question to candidates running for public office in upcoming elections. All ideas regarding how to best achieve the end result are welcome.

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