For much of the twentieth century, corporations pursued a simple strategy: maximize shareholder wealth. This strategy led to significant gains for shareholders, but too often came at the expense of the public. This dynamic was on display in the past two years, as high-risk financial instruments brought down the global economy. These instruments, including credit default swaps and mortgage-backed securities, offered significant profit potential, but as we now know, they also posed a serious risk to the economy. Indeed, many of these instruments failed, doomed numerous firms, and contributed to a recession. As world economies seek to rebound, the time is right to reform corporate law to address the singular focus on profits that has imperiled so many corporations and economies.

In this Essay, I propose that directors and officers reaffirm a duty to consider the public impact of corporate decisions. In doing so, they must refrain from corporate acts that impose a significant risk on the public. Aside from specific regulations, nothing in corporate law forces corporations to consider the negative macroeconomic consequences of their decisions. True to corporate law history and doctrine, I propose a corporate public duty that maintains commercial pursuits as the primary purpose of the corporation, but restrains the corporation from acts detrimental to the public. Under this conception, many of the destructive acts of recent years may have been averted.