Once again, Elizabeth Warren has demonstrated her special qualities. Her proposed Accountable Capitalism Act dusts off and updates an idea from the Progressive Era: Large corporations should be required to get their charters from the federal government and should be held to higher standards of conduct.
Specifically, corporations with revenues of $1 billion and up would have to serve all their stakeholders, not just their shareholders. Workers would elect 40 percent of board members, and board members would be prohibited from engaging in defined conflicts of interest.
Political outlays would take the approval of 75% of shareholders, and corporations with a pattern of repeated or egregious law-breaking could have their charters revoked.
The bill is not only sound policy in its own right; it opens an overdue conversation. Since the failure of Congress to pass a federal charter law under Teddy Roosevelt, states have engaged in a race to the bottom to pass the most lax chartering laws. (Delaware, where two-thirds of American corporations are technically domiciled, won).
Warren’s detractors pan her as a schoolmarmish law professor, but this kind of deep knowledge informs her political savvy as a progressive leader.
Lax chartering laws invite and condone abuses. If you want to learn just how threatened corporate America is by this rather common-sense reform to un-rig the rules, try searching ‘Warren corporate charter’. You get characterizations such as “Venezuelan socialism,” “unhinged,” and “feudalism.”
Bring it on! The Roberts Court may think corporations are citizens, but if we can get a real public debate, there are still more voters than corporations.