{"articles":[{"id":7415,"title":"Warren Offers Bill to Make Corporations Accountable to Workers, Not Just Shareholders","html_content":"

by Causes | 8.16.18

What’s the story?

Sen. Elizabeth Warren (D-MA) has introduced legislation that would give workers more influence over corporate decision-making and profit distribution.
“The Accountable Capitalism Act restores the idea that giant American corporations should look out for American interests,” Warren wrote in a companion op-ed published in the Wall Street Journal (paywall).

“American corporations exist only because the American people grant them charters. Those charters confer valuable privileges - such as limited legal liability for their owners - that enable businesses to turn a profit. What do Americans get in return? What are the obligations of corporate citizenship in the U.S.?”

What would the Accountable Capitalism Act do?

Create an Office of U.S. Corporations inside the Department of Commerce.
Require companies with more than $1 billion in annual revenue to obtain a federal charter of corporate citizenship, which would obligate the companies to weigh the interests of all stakeholders - including workers and local communities - in their decision-making.
“Give workers a stronger voice in corporate decision-making” by requiring companies to allow their employees to elect 40 percent of the board of directors.
Corporate political activity would have to be authorized by 75 percent of directors and shareholders.
To discourage managers from working to inflate share prices to only benefit themselves, corporate executives would be banned from selling stocks within five years of receiving them, or within three years of a buyback.

What are those opposed to the legislation saying?

Jeffrey Miron, the director of economic policy studies at the Cato Institute, told CNBC's \"Power Lunch\" that Warren's bill is “just a recipe for more crony capitalism, not for more productive capitalism” and added consumers and other stakeholders have other tools to express displeasure with corporate decision-making:

“They can organize boycotts. They don’t buy the product; they don’t buy the stocks. That drives down the value of the company, and then the management and remaining shareholders will respond. The market is a much better way of encouraging companies to respond to consumer wants and needs than this top-down rule that will end up just generating more insiders and less accountability.”

Other arguments for NAY and YEA can be found our bill page.

What do you think?

Do you support the Accountable Capitalism Act? Should companies be required to give something back to the community? Or should businesses only be obligated to generate economic returns for shareholders? Hit Take Action and tell your reps, vote on our bill page, then share your comments below.

—Josh Herman

(Photo Credit: TeamOktopus / iStock)

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