Senator Warren and House Assistant Speaker Luján Announce Plan to Reintroduce the Accountable Capitalism Act

Comprehensive and bicameral bill would help eliminate skewed market incentives and empower American workers; Warren also calls on Business Roundtable CEOs to honor their commitments to 'promote an economy that serves all Americans'

• Requiring very large American corporations to obtain a federal charter as a "United States corporation," which obligates company directors to consider the interests of all corporate stakeholders: American corporations with more than $1 billion in annual revenue must obtain a federal charter from a newly-formed Office of U.S. Corporations at the Department of Commerce. The new federal charter obligates company directors to consider the interests of all corporate stakeholders -- including employees, customers, shareholders, and the communities where the company operates. This approach is derived from the thriving benefit corporation model that 35 states and the District of Columbia have adopted and that companies like Patagonia, Danone North America, and Kickstarter have voluntarily embraced with strong results.

• Empowering workers at U.S. corporations to elect at least 40% of board members: Borrowing from the successful approach in Germany and other developed economies, a U.S. corporation must ensure that no fewer than 40% of its directors are selected by the corporation's employees. For the reintroduction of their bill this Congress, Senator Warren and Assistant Speaker Luján strengthened the protections in the bill to ensure that worker-appointed directors provide meaningful representation that worker-appointed directors are protected from retaliation, and that workers have access to the same information as shareholders.

• Restricting the sales of company shares by the directors and officers of U.S. corporations: Top corporate executives are now compensated mostly in company stock, which gives them huge financial incentives to focus exclusively on shareholder returns. To ensure that they are focused on the long-term interests of all corporate stakeholders, the bill prohibits directors and officers of U.S. corporations from selling company shares within five years of receiving them or within three years of a company stock buyback.

• Prohibiting U.S. corporations from making any political expenditures without the approval of 75% of its directors and shareholders: Drawing on a proposal from John Bogle, the founder of the investment company Vanguard, U.S. corporations must receive the approval of at least 75% of their shareholders and 75% of their directors before engaging in political expenditures. This ensures any political expenditures benefit all corporate stakeholders.

• Permitting the federal government to revoke the charter of a U.S. corporation if the company has engaged in repeated and egregious illegal conduct: State Attorneys General are authorized to submit petitions to the Office of U.S. Corporations to revoke a U.S. corporation's charter. If the Director of the Office finds that the corporation has a history of egregious and repeated illegal conduct and has failed to take meaningful steps to address its problems, they may grant the petition. The company's charter would then be revoked a year later -- giving the company time before its charter is revoked to make the case to Congress that it should retain its charter in the same or a modified form.

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