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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Senate Committee on Commerce, Science, and Transportation
    IntroducedAugust 15th, 2018

What is it?

This bill — the Accountable Capitalism Act — would require American corporations with more than $1 billion in annual revenue to obtain a federal charter as a “United States Corporation” which would obligate company directors to consider the interests of all corporate stakeholders, including: employees, customers, shareholders, and the communities in which the company operates. It’d also give employees the power to choose at least 40% of the corporate board members, in addition to placing restrictions on sales of stock by directors and on corporate political expenditures.

Directors and officers of chartered U.S. corporations would be prohibited from selling company shares within five years of receiving their shares, or within three years of a company stock buyback.

Before making any political expenditures, chartered U.S. corporations would be required to receive the approval of at least 75% of their shareholders and 75% of their directors.

A chartered U.S. corporation that engages in repeated and egregious illegal conduct may have its charter revoked by the Office of United States Corporations. State attorneys general would be authorized to submit petitions for charter revocations to the office, and the office could revoke the charter if it finds the company engaged in the illegal conduct and hasn’t taken steps to address its problems. The company’s charter would be revoked a year after the decision is rendered in order to give the company time to make a case to Congress that it should retain its charter.

This bill would include a severability clause, which would allow portions of the bill to be struck down by courts without causing the entire bill to be struck down.

Impact

Employees, consumers, and communities; shareholders; corporate boards; companies that would have to obtain a federal charter as a “U.S. corporation”; and the to-be created Office of United States Corporations.

Cost

A CBO cost estimate is unavailable.

More Information

In-Depth: Sen. Elizabeth Warren (D-MA) introduced this bill to “reverse the harmful trends over the last thirty years that have led to record corporate profits and rising worker productivity but stagnant wages” by requiring that employees of large U.S. corporations have more say over corporate decision-making:

“There’s a fundamental problem with our economy. For decades, American workers have helped create record corporate profits but have seen their wages hardly budge. To fix this problem we need to end the harmful corporate obsession with maximizing shareholder returns at all costs, which has sucked trillions of dollars away from workers and necessary long-term investments. My bill will help the American economy return to the era when American companies and American workers did well together.”

Black Entertainment Television co-founder Robert Johnson said in an interview on CNBC’s “Closing Bell” that Warren’s bill is a misguided attempt to “channel Robin Hood” that carries “the dangerous potential of channeling Karl Marx”, and added:

“Most companies and most boards look at all of their stakeholders, not only their shareholders. They look at their employees, they look at the community where they reside and do business, they look at even the vendors that they do business with. So I think it’s a solution in search of a problem that’s absolutely not necessary. Her intentions may be great, but putting the government in the middle of how corporations in this country are run is a slippery slope toward a socialist economy that does not, in my opinion, work in the American system.”

Harvard University economics professor Jeffrey Miron, a guest on CNBC’s “Power Lunch”, said Warren’s bill is “just a recipe for more crony capitalism, not for more productive capitalism” and added consumers and other stakeholders have other tools to express displeasure with corporate decision-making:

“They can organize boycotts. They don’t buy the product; they don’t buy the stocks. That drives down the value of the company, and then the management and remaining shareholders will respond. The market is a much better way of encouraging companies to respond to consumer wants and needs than this top-down rule that will end up just generating more insiders and less accountability.”

The bill was introduced with no cosponsors.


Media:

Summary by Eric Revell

(Photo Credit: iStock / Nikada)

AKA

Accountable Capitalism Act

Official Title

A bill to establish the obligations of certain large business entities in the United States, and for other purposes.

    Employees should ALWAYS HAVE A SAY on important company matters. If it weren’t for the employees the owners would be out of business
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    Get government out of business, unless you want to destroy it. Government has become a cancer.
    Like (55)
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    Theodore Roosevelt said on corporations: "Our aim is not to do away with corporations; on the contrary, these big aggregations are an inevitable development of modern industrialism. ... We are not hostile to them; we are merely determined that they shall be so handled as to subserve the public good. We draw the line against misconduct, not against wealth." Vote YES.
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    Those who work and provide the profits for corporations should have a say in the choice of board members and the social and political positions of the corporations. The view of big businesses seems to be that the country exists to serve the corporation instead of the other way around. And, what the hell is wrong with socialism anyway?
    Like (51)
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    Yes corporations should be allowed to choose up to 40% of the board. This will increase accountability for decisions the board members make. Too many time a corporations decisions are based on the amount of profit not how decisions affect their employees.
    Like (38)
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    Too much government overreach, but that’s the point isn’t it? These are the early stages of the move to socialism.
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    Should your gardener get a vote on your financial decisions? Should he have veto power over whether you switch jobs? How ridiculous!
    Like (26)
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    Management is overhead. They produce no value, only the workers produce value. The workers should have a say. Their the ones actually making the money.
    Like (17)
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    Socialist and or communist doctrine has no place in corporate America.
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    Get government out of telling companies how to run their business!
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    This is unnecessary, as corporate boards already consider more than just shareholder value in their decisions — they know that how workers, consumers, and communities perceive their actions directly impacts the company’s well-being. This bill is a classic example of government overreach into the economy. Keep the greedy paws of the bloated federal government out of the free market.
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    It's time to put an end to the ridiculous and disgusting maxim that says a corporation is only beholden to its shareholders. Workers create all the profits, and are too often treated like garbage for their troubles. Plus, those with all the wealth too often make immoral and environmentally irresponsible decisions.
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    SB 3348 needs to be passed. Thank you Senator Warren.
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    How about 50-50
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    TOO BIG TO FAIL Corporate America is as corrupt and anti THe “Little Guy” as is our current Rotting RED ( haired and Russian Puppet rule) Leader, Trump, who continues to push the buttons on his corporations to increase his wealth at the expense of the world! Unfettered by SPINELESS GOP CONGRESS! Vote them out in 2018 and 2020, save American Democracy for our children!
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    The board represents the owners of the company. Full stop. Employees have gotten their share of the production - it's called salary/wages and benefits. The best thing you can do to improve employees conditions is get regulations out of the way that prevent the creation of new businesses (which is plenty difficult enough without the government's intervention). That gives the best employees options and increases demand for talent, allowing workers to command top dollar for scarce skills. Employees only say in their employer is the right to take their talents elsewhere. To argue that they have a right to the governance of their employer betrays a fundamental misunderstanding of what is and is not a right.
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    This is an amazing idea! Let's do it!
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    This would be an excellent first step to address the rampant income inequality currently plaguing our nation, which the current regime seems intent on increasing.
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    No Way should they.
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    We are capitalists, not communists
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