2018-08-15 14:40:00 Wed ET
technology social safety nets education infrastructure health insurance health care medical care medication vaccine social security pension deposit insurance
Senator Elizabeth Warren advocates the alternative view that most U.S. trade deals serve corporate interests over workers, customers, and suppliers etc. She then introduces her new bill, the Accountable Capitalism Act, which would require large public corporations to consider the key interests of stakeholders in corporate decisions. If U.S. Congress passes this bill, large public corporations with more than $1 billion sales revenue would need to apply for a corporate charter from the federal government. These corporations would effectively have to become benefit corporations, or b-corps, in order to recognize the fact that their key fiduciary duties extend beyond shareholder wealth maximization.
Also, employees would be able to elect 40% of the board members (in the similar form of German co-determination), and top management would have to hold equity stakes for 5 years (or 3 years if a benign share buyback takes place). At least a 75% super-majority of both board members and shareholders would have to vote before the company make productive use of internal funds for political purposes.
In light of stark economic inequality, worker welfare, and corporate involvement in political affairs, the Accountable Capitalism Act helps address key socioeconomic issues in Corporate America. Senator Warren's provisos help tackle the complex perennial problem that many U.S. public corporations fixate on short-term stock price performance. As senior management often attempts to maximize short-term profits, obscene executive compensation reflects low performance-pay sensitivity to the detriment of stakeholders such as employees, customers, and suppliers etc.
Under the new legislation, CEOs, directors, and all other executive officers would need to fulfill their fiduciary duties of care, loyalty, and good faith in order to honor longer-term stakeholder value optimization. When push comes to shove with no perfunctory compliance exercises, it is key for these U.S. large public corporations to take into account not only shareholder interests but also the primary interests of all major stakeholders over the long run.
Jeffrey Miron, Harvard director of undergraduate studies, warns that this legislation would give the federal government excessive control over U.S. public corporations. In comparison to the top-down rule, Miron proposes relying on socially-responsible funds as a better market mechanism to tame U.S. large public corporations.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2023-08-07 12:29:00 Monday ET
Oxford macro professor Stephen Nickell and his co-authors delve into the trade-off between inflation and unemployment in the dual mandate of price stability
2023-03-14 16:43:00 Tuesday ET
Several feasible near-term reforms can substantially narrow the scope for global tax avoidance by closing information loopholes. Thomas Pogge and Krishen
2018-09-19 12:38:00 Wednesday ET
The Trump administration imposes 10% tariffs on $200 billion Chinese imports and expects to raise these tariffs to 25% additional duties toward the end of t
2018-01-21 07:25:00 Sunday ET
As he refrains from using the memorable phrase *irrational exuberance* to assess bullish investor sentiments, former Fed chairman Alan Greenspan discerns as
2019-10-05 07:27:00 Saturday ET
Treasury Secretary Steven Mnuchin indicates that there is a good conceptual trade agreement between China and the U.S. in regard to intellectual property pr
2017-05-13 07:28:00 Saturday ET
America's Top 5 tech firms, Apple, Alphabet, Microsoft, Amazon, and Facebook have become the most valuable publicly listed companies in the world. These