Democracy’s Blind Spot: Corporations and the Public Interest

By Robert C. Hinkley

16 October 2025

"Democracy is the worst form of Government except for all those other forms that have been tried from time to time." --Winston Churchill

People are slowly coming to recognise that democracy has a big problem: its failure to govern the behaviour of the most powerful among us. The result is severe and growing harm to the public interest, not just regarding the environment, but the public health and safety, the dignity of employees and the wellbeing of our communities as well.

The primary purpose of government is to protect citizens from harms they cannot protect themselves from individually. When governments fail to do this, trust erodes, and voters begin looking to authoritarians who falsely promise to restore order.

Nowhere is this failure more evident than in the relationship between government and big corporations.  Under existing law, corporations are free to engage in any behaviour that is not specifically prohibited—and they have the right to participate in democracy in ways that delay or block laws that would restrict their harmful conduct.

In practice, this means corporations can cause enormous damage to the environment, people and communities, and then prevent governments from making them stop. The corporate law duty requiring directors to always “act in their company’s best interests” gives them the excuse, encouragement and justification to continue.

No company sets out to harm the public. But once a business becomes large and successful, advances in science sometimes reveal that its activities are causing severe damage.

In a healthy democracy, such discoveries should prompt corporate leaders to act voluntarily to stop the harm. But corporate law makes this almost impossible. Directors are legally obliged to act in the company’s best interests—and when large investments are at stake, that duty encourages, if not compels, them to continue doing what they now know is destructive.

This problem isn’t new. It dates back to the 19th century, when governments competed to attract corporate business by stripping away obligations to the public interest. Back then, corporations were small and lacked the capacity to do widespread harm.

The modern corporation is another creature entirely, global in scale, technologically advanced, and capable of inflicting immense, even global, damage.

Having no legal duty to protect the public interest, even from severe harm, some corporations have become predatory. The climate crisis is the most obvious result. The continued emission of greenhouse gases from burning fossil fuels to generate electricity and power vehicles is driving global warming and climate change.

But fossil fuel and motor vehicle companies are not alone. Other industries are responsible for inflicting severe harm on the public health. Still others are causing harms that remain undiscovered. Unless the law changes, more will follow.

The corporate law duty to always act in the company’s best interests may be the only law that requires people—corporate directors—to intentionally continue inflicting severe harm they could otherwise stop. It embeds in both boardrooms and the wider public a dangerous mindset: that a corporation’s pursuit of self-interest at the expense of the environment and society is normal, and until government intervenes, acceptable.

The climate crisis should have taught us by now that this system of government and corporate behaviour is headed in the wrong direction. The public interest can be under attack while government stands powerless to defend it.

What is less often recognised is that democracy depends on citizenship—the willingness of individuals and institutions to exercise self-restraint and avoid inflicting serious harm on others and on the environment, even before it is required by law.

Corporate law, as it stands, undermines the citizenship of our most powerful citizens.  This must change.

If democracy is to survive the crises of climate change, inequality and corporate overreach, we must close the gap between what the law allows and what the public interest demands.

Recently, the U.N. International Court of Justice issued an advisory opinion declaring that nations can be held liable for failing to regulate corporations within their jurisdictions to prevent the emission of greenhouse gases.  So, what’s to be done? 

The next evolution of democracy will not be found in new slogans or stronger leaders—it will come when we require the most powerful institutions on earth to act as responsible citizens of the societies that sustain them.

That starts with the rules of corporate governance.  Existing law dictates that directors only obligation is to “act in their company’s best interests” without any balancing obligation to protect the public interest.  This rule should be changed to provide that acting in the company’s best interests shall not include behaviour that inflicts severe harm on the environment, human rights, the public health and safety, the dignity of employees or the wellbeing of the communities in which the company operates. 

In a few weeks the 30^th U.N. Conference of the Parties (COP) will be held.  For more than three decades the fossil fuel industry and its biggest customers have frustrated new laws which would make them stop emitting greenhouse gases.  Meanwhile, Mother Nature is telling us we're on the clock and fast running out of time. Trying to add stricter laws regulating corporate emissions in response to pledges made at previous COPs hasn't worked and isn't going to work this time either. 

Perhaps it's time for the delegates to stop focusing on the end of the pipe symptoms (i.e., the emissions) and target the source of the problem instead--corporate decision making. This time they should pledge to amend the rules of corporate governance and make it the obligation of directors to never knowingly allow their company to continue inflicting severe harm on the environment again. Companies can do both--make money and not severely harm the environment--they're not mutually exclusive.