Accountable Capitalism Act would bring about ‘fundamental change’, redistribute wealth and give more power to workers
Erin Durkin in New York
Wed 15 Aug 2018
Elizabeth Warren, the Massachusetts senator tipped as a Democratic presidential candidate in 2020, has unveiled new plans for legislation aimed at reining in big corporations, redistributing wealth, and giving workers and local communities a bigger say.
Warren will introduce the bill dubbed the Accountable Capitalism Act on Wednesday. The proposal aims to alter a model she says has caused corporations to chase profits for shareholders to the detriment of workers.
Under the legislation, corporations with more than $1bn in annual revenue would be required to obtain a corporate charter from the federal government – and the document would mandate that companies not just consider the financial interests of shareholders.
Instead, businesses would have to consider all major corporate stakeholders – which could include workers, customers, and the cities and towns where those corporations operate.
Anyone who owns shares in the company could sue if they believed corporate directors were not meeting their obligations.
Employees at large corporations would be able to elect at least 40% of the board of directors. An estimated 3,500 public US companies and hundreds of other private companies would be covered by the mandates.
In an article announcing the bill, Warren said she was looking to reverse “a fundamental change in business practices” dating back three decades that made corporations beholden to the bottom line at the expense of better worker wages and local investment.
“The obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer,” she wrote in the Wall Street Journal.
The proposal would create a new Office of United States Corporations within the Department of Commerce, which would be responsible for granting the charters – and which could revoke a charter if a state attorney general requests it, and the office finds the firm has a history of egregious and repeated illegal conduct and has failed take action to correct it.
Large companies dedicated 93% of their earnings to shareholders between 2007 and 2016 – a shift from the early 1980s, when they sent less than half their revenue to shareholders and spent the rest on employees and other priorities, Warren said.
“Real wages have stagnated even as productivity has continued to rise. Workers aren’t getting what they’ve earned. Companies also are setting themselves up to fail,” she wrote.
Corporations currently get their charters at the state level.