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Warren’s new act proposes that the most powerful corporations in the country can, by design, become more responsible
Earlier this week, Senator Elizabeth Warren introduced a new piece of legislation – the Accountable Capitalism Act – which requires the largest companies in America to get a federal charter that is conditioned on their recognizing their obligations to society. The idea is as simple as the lesson from Spiderman: with great power comes great responsibility. The biggest corporations are extraordinarily powerful, but they often exercise that power in a way that can deepen economic inequality, stack the deck in our politics in favor of the powerful, and undermine the well-being of workers.
The Accountable Capitalism Act addresses these issues. The bill would require corporations with more than $1bn in revenue to apply for a corporate charter from the federal government. To get this charter, the companies would effectively have to become benefit corporations (or b-corps) – companies that recognize that their duties extend beyond maximizing profits for shareholders. In addition, 40% of the board would be elected by employees, top executives would have to hold stock for five years (or three years if there’s a stock buy-back), and three-fourths of the board and shareholders would have to vote before the company used funds for political purposes. These provisions address interlinked problems: companies are too fixated on stock prices, executives frequently try to maximize short-term profits, and workers’ rights and compensation often get the short end of the stick. (Full disclosure: I used to work for Senator Warren.)
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