Question

What might be a problem with democracy as a structure to run a publicly held company?

Answer 1

There is a huge conflict of interest if a publicly held company is run by the government in a democracy.

Democracy is all about people choosing their leader to make the decisions on behalf of them. Leaders try to take favorable decisions which can benefit people. If the same government is running a firm or an organization, for example, say a bread making and selling factory. The main motive of that installation as a productive unit should be to earn a profit. For earning a profit the bread factory will have to sell the goods at a higher price. But people will benefit more if the bread is sold at a minimum price i.e. the firm doesn't make a profit.  

Now the leaders have to choose between making a profit as businessmen or serve people better by providing them bread at a minimum cost. They have two jobs here to run a company or serve people and both the jobs are contradicting.