Gaining Traction

24 July 2025

[Note to reader: The campaign to enact the Code for Corporate Citizenship described herein got a significant boost today from the International Court of Justice which issued a landmark advisory opinion holding that states must take action to halt climate change “by deploying appropriate measures to achieve deep, rapid, and sustained reductions of GHG emissions, including by regulating the conduct of public and private operators within their jurisdiction or control, with effective enforcement and monitoring."][More to follow.]

A correspondent from Ireland asked me the following:

 ·     Where have you seen your ideas about changing corporate law to include the Code for Corporate Citizenship[i] gain traction?

·     What do you see as the biggest barriers?

·     As corporate law is virtually a 'closed system', carbon copied the world over, where do you see the opportunities to break it open?

·     And what would have to happen to move this agenda forward?

Replying took me longer than I initially thought it would. I’d never really sat down and tried to work out how to get the Code enacted.  These questions made me take a few days to think about it.  I hope my reply will encourage others to offer additional ideas.

Since I first suggested the Code, I’ve been focussed on developing the idea and showing that there is another way to bring to a halt corporate anti-social behaviour that severely damages the public interest.  Many have said to me that it could never become law because corporations are too powerful politically.  Others said the best we could do was to try to get companies to inflict less damage by shaming, cajoling and incentivizing them. 

In other words, getting them to voluntarily change their behaviour to reduce the harm.  As a corporate lawyer, I couldn’t see why companies would change voluntarily when they were operating legally and the cost of changing was great. 

Current Situation

I start from the position that no one can really want the current situation to continue.  That situation is this:

·     The function of government is to protect the public interest—especially from severe harm,

·     Companies only exist because governments have passed corporate laws allowing for them to exist and operate,

·     In most countries, companies can do whatever they want so long as no law already prohibits it,

·     Companies don’t start out to severely harm the public interest.  They start a business which becomes successful. Only later do advances in science and thinking make the harm they are causing apparent,

·     By then, billions are invested in the business causing the harm,

·     Existing corporate law enacted by governments starting in the late 1800s, encourages rather than discourages directors to continue by requiring them to act in their company’s best interests,

·     When the cost of stopping or changing the business is great, directors generally will not do it until a law is passed requiring it. Advances in technology might spur them to change, but the existing law has the effect of slowing down investments in research and development that lead to these advancements, and

·     The result of these factors is that damage to the public interest continues and accumulates.

The clearest example of this today is obviously the inability of the world’s governments to pass laws requiring emitters of large amounts of greenhouse gases to stop.

For more than 25 years, I’ve been trying to bring this problem to people’s attention in the hope that they will see that the only solution is to change the duty of directors to make them safeguard the public interest from severe harm at all times.

Flaw in the Law

The way I see it is that there is a flaw in the law which we can now see undermines the whole concept of liberal democracy.  Government that can’t protect the public interest from big companies, doesn’t make sense.   

Government and business both exist for the benefit of people.  Not vice versa.  That’s why a liberal democracy is referred to as being of, by and for the people not of, by and for big business.

So, is it possible to change the law to include the Code?  Or, has democracy created an unsolvable problem which will continue to severely damage the environment and other elements of the public interest and may eventually cause its own death?

The Way Out

For the Code to gain traction and become law, action will be required.  People will have to tell their legislators they want the duty of directors to once again require the public interest to be protected from severe harm (as it was before the current duty of directors was enacted). 

There are good reasons to believe this can be achieved. 

·     The duty of directors in the corporate law is essentially the same in every country,

·     The Code is a matter of first principles, a uniform simple solution to a simple problem which can be applied everywhere.  It doesn’t require special expertise to understand it.  It needn’t be the subject of endless legislative debate,

·     It lends itself to being the number one issue for candidates to public office in every election.  All should be asked, “Do you favour the Code for Corporate Citizenship?”

·     The Code doesn’t try to solve the problem of all corporate anti-social behaviour, only that behaviour which is severely damaging. This means the impact of its enactment, if any, will be small on all but those few big companies now causing severe harm,

·     The cost of managing a campaign to enact the Code is manageable.

 Many will have thoughts on how best to move the Code towards passage.  Though not a complete political novice, I’m a corporate lawyer not a political operative. 

That being said, there are only a few hundred jurisdictions where the corporate law needs to be changed (The US includes 50 of them.  The EU twenty eight.).  This would be how I would start:

·     Set up a coordinating team having experience in dealing with large constituencies and building systems.

·     Find a top international law firm capable of conducting an all jurisdiction survey identifying the corporate law provisions to be modified by the Code and the process necessary to get it enacted.

·     Select a small number of jurisdictions (7-10) to conduct an initial campaign before moving on to all jurisdictions. (This will keep initial costs down and allow the coordinating team and its advisors to learn from the experience.)

·     Find political advisors and public relations firms in jurisdictions selected for the initial campaign.

·     Find organizations with large constituencies willing to collaborate in the jurisdictions selected (e.g., NGOs, religious organizations, universities, business schools, law schools, and social groups).

·     Find “angel investors” willing to finance the initial campaign.

·     Assuming success in the initial campaign, expand the campaign to the remaining jurisdictions.

If there is a barrier to this plan, it’s opposition from the companies which have the most to lose—those which are already inflicting severe harm.  They may try to get the proposal to adopt the Code bogged down in partisan debate when it really shouldn’t be a partisan issue. 

It’s difficult to see why anyone not heavily invested in one of these businesses would support the idea that corporations should have an inherent right to intentionally and endlessly inflict severe harm until a law can be enacted to stop it.   It should by now be obvious that boundaries on the right of corporations to pursue their own interests are necessary. 

The strategy of addressing the problem globally, should also reduce the power of these companies to lobby against better protecting the public interest.  If people all over the world stand up, the power of big companies to lobby in individual jurisdictions should be greatly reduced.  Further, they may choose not to interfere in democracy at all.  They may realize the people advocating for the Code are their customers.

Limiting the object of the Code to eliminating severe damage, makes it much less threatening to the corporate community as a whole.  I take some comfort in the fact that, the corporations upon which the Code will have the greatest impact, are a tiny minority of all companies and there is a great deal of positive sentiment from the others for more socially responsible corporate behaviour. 

When I first suggested the Code in the late 1990s, the American Business Roundtable (ABR) claimed the purpose of a corporation was simply to make money for shareholders.   

Corporate social responsibility (CSR) was in its infancy.  When CSR did occur, the press would cover it as a human interest story (“Man Bites Dog”).  There were no B Corporations.  There was very little socially responsible investing (SRI). There was no sustainability movement.

Since then, CSR has been rebranded as ESG.  Every business school now teaches it, together with sustainability, as a new business discipline.  Every big company now, at least pays it lip service.  B Corporations now number over ten thousand.  Proponents of SRI now claim that there is more than $30 trillion under socially responsible management. In 2019, the ABR changed its stance on the purpose of the corporation to include that directors should consider the environment and the interests of other stakeholders (e.g., customers, suppliers and employees).

The only effect on companies not already causing severe harm is that they will need to monitor for the risk that their operations might be discovered causing severe harm in the future.  For most of these, it will be such a remote possibility that it won’t involve any additional burden. 

For the others, monitoring their business for the possibility of it causing severe harm will not be overly burdensome and will allow them to mitigate the risk while the costs of doing so are still small. 

I believe that most directors want their companies to be good citizens and not inflict severe harm on the environment or their customers, employees or communities.  This makes them more likely to be advocates of the Code than opponents.

All that said, I am very interested in hearing anyone’s further thoughts on how to move the Code from an idea to action.

[i] The Code is a proposal to amend the legal duty of corporate directors which now requires them to “act in the best interests of their company.”  It would add: “but not at the expense of severe damage to the environment, human rights, public health and safety, dignity of employees or wellbeing of the communities in which the company operates.”