Senator Elizabeth Warren will introduce a bill to Congress on Wednesday that aims to move companies away from “maximizing shareholder value” and provide more support to employees and other stakeholders.
The Accountable Capitalism Act proposes a series of reforms to increase corporate accountability, strengthen the voice of workers and others in business decisions and shift corporations away from their focus on shareholders.
In the 1980s, the largest companies in the US gave less than half of their profits to shareholders, and reinvested the rest in the company, according to a fact sheet on the bill provided by Warren’s office to the Guardian.
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But over the past decade, more profits have accrued to shareholders than to employees or long-term investments. During that time, labor productivity has increased, with little increase in the real income of the average worker, while income and wealth inequality has increased.
“Workers are the main reason why corporate profits go up, but their wages have not changed while corporate shareholders are seen as thugs,” Senator Warren said in a statement on the bill “We need to stand up for working people and hold big companies accountable for decisions that hurt workers and consumers while lining their pockets.” shareholders.”
Since 93% of all US stocks are owned by the richest 10% of the population, more than 50% of all US households own no stock at all, Warren says that corporate policy to increase shareholder value is predicated on “making people The richest Americans are the richest in every way”.
The bill will authorize companies with a turnover of more than $1bn a year to obtain a corporate charter as a “United States Corporation” under the obligation to consider the interests of all stakeholders and companies involved in repeated illegal and bad behavior can have their papers revoked.
The law will also mandate that at least 40% of a company’s board of directors be directly elected by employees and will restrict company directors and officers from selling shares within five years of acquiring shares or three years during the purchase of company stock.
All corporate political expenditures will also need to be approved by at least 75% of shareholders and directors.
He first introduced the bill in 2018 in the US Senate, with Congressman Mark Pocan of Wisconsin introducing a companion bill in the House.
The bill faces stiff opposition in Congress, particularly from incoming Republican administrations. Business leaders have considered similar proposals. In 2019 the Business Roundtable, a leading US business lobby, called for a redefinition of the organization’s mission away from focusing on shareholders to “an economy that works for all Americans”. But that redefinition now seems to have been scaled back.
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