Published on: October 18, 2019
Topics: ESG and Diversity & InclusionA new proposal by presidential candidate Sen. Bernie Sanders (I-VT) would require all large companies to contribute 20% of company stock to employees while granting workers voting control of 45% of seats on company boards, among a variety of other measures similar to Sen. Elizabeth Warren’s (D-MA) Accountable Capitalism Act.
Companies would be mandated to contribute to employees 2% of their stock per year over a 10-year period. An “employee-controlled fund” would distribute any dividends to employees.
Similar to Sen. Warren’s plan, Sanders’ plan also calls for:
- A large portion of company boards to be elected by employees, at 45% to Warren’s 40%; and
- The establishment of a Bureau of Corporate Governance at the Department of Commerce, which would grant federal charters to corporations binding them to mandates regarding corporate responsibility.
Stock buybacks banned: Sanders' plan also calls for an outright ban on stock buybacks.
Outlook: Two of the top three Democratic candidates for president are now putting forward proposals that would mandate that companies take a broader view of who is a stakeholder and the consequent corporate responsibilities.