Last August, Sen. Elizabeth Warren (US Senate) introduced the “Accountable Capitalism Act”.
The legislation is intended to restore the idea that giant (American) corporations should consider the interests of all major corporate stakeholders ( employees, customers and the community and shareholders), not only shareholders, in company decisions.
The Act provides:
– Very large American corporations must obtain a federal charter as a “United States corporation,” which obligates company directors to consider the interests of all corporate stakeholders;
– The boards of United States corporations must include substantial employee participation (no fewer than 40% of its directors must be selected by the corporation’s employees);
– Sales of company shares by the directors and officers of United States corporations are restricted;
– United States corporations must obtain shareholder and Board approval for all political expenditures;
– A United States corporation that engages in repeated and egregious illegal conduct may have its charter revoked.
The principle of “maximisation of shareholder value” adopted in the 1980s is damaging not only society at large, but corporations the adopt it as well; this due to a too low percentage of profits reinvested in the company to foster its growth. This is true not only in the USA but also in Europe; should we think to introduce a legislation similar to the Accountable Capitalism Act also in Europe?