When the World Changes the Law Must Also

1 June 2025

“I am not an advocate of frequent changes in laws and constitutions. But laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths are discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times.  We might as well require a man to wear still the coat which fitted him when he was a boy as civilized society to remain ever under the regime of his barbarous ancestors.”—Thomas Jefferson

The author of the Declaration of Independence and America’s third president gave a good deal of thought during his life to how government should work and what was necessary to preserve freedom and protect the public interest at the same time.   The words above, from a letter he wrote after his presidency in 1816, are inscribed on the walls of the Jefferson Memorial in Washington D.C. 

The corporate law duty of directors “to act in the best interests of their company” started being enacted about 150 years ago. Today, it’s the law everywhere.  It dedicates corporations to the pursuit of self-interest and removes any requirement that they protect the public interest beyond what other laws require. Back then, corporations were smaller, acted mostly locally and used primitive technology.  Eliminating any requirement that directors protect the public interest probably didn’t matter. Corporations’ ability to harm the environment, people and our communities was nearly non-existent.

Today, it matters a great deal. Companies with billions invested in businesses that cause global warming, kill millions every year with dangerous addictive products or tear apart our communities with social media platforms that distribute misinformation and hate, aren’t going to stop so long as the law continues to tell their directors only to act in their company’s best interests. 

Why should companies have all the rights of citizenship, but none of its obligations? To get out from under a system designed before the invention of the light bulb, the law should be changed to reflect our change in circumstances. It needs to require that the pursuit by directors of their company’s best interests, must not come at the expense of the environment, human rights, the public health and safety, the dignity of employees or the wellbeing of the communities in which they operate.