The Solution: The Code for Corporate Citizenship

The Code For Corporate Citizenship is an idea for amending current corporate law that will change the law to make it conform to what 95% of Americans say they would prefer. It will balance the rights of citizenship that corporations now have with certain enumerated obligations of citizenship.

The Code For Corporate Citizenship is a systemic solution to the problem of corporate abuse of the public interest. It addresses the cause rather than the symptoms of corporate pollution, human rights violations, unsafe products, maltreatment of employees and corporate bullying of our communities. Rather than address “where” and “how much” corporate abuse the people should tolerate, it addresses “why” corporations misbehave and eliminates the motivation for misbehavior contained in existing law.

The Code For Corporate Citizenship does not eliminate the profit motive that drives capitalism, but it balances it with structural, legally enforceable safeguards to the public interest. It will empower managers and employees to protect the public interest, where current law gives them incentives to damage it.

In its simplest form, the Code For Corporate Citizenship can be achieved by adding just 28 words to the duty of directors to use their best efforts to make money for shareholders. After adoption of the Code, directors will still have a duty to make money for shareholders… “BUT NOT AT THE EXPENSE OF THE ENVIRONMENT, HUMAN RIGHTS, THE PUBLIC HEALTH OR SAFETY, THE COMMUNITIES IN WHICH THE CORPORATION OPERATES OR THE DIGNITY OF ITS EMPLOYEES.

The Code For Corporate Citizenship will be backed by a private right of action allowing private citizens to sue the corporation and its directors on a strict liability basis. Both damages and injunctive relief (to stop the activity) will be available and the Attorney General of each state will be given the power to bring civil suits on behalf of the state and criminally prosecute intentional violations.