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At very large American corporations, at least 40 percent of their individual board of directors would have to be selected by the company's employees, under legislation announced Wednesday by U.S. Sen. Elizabeth Warren.
"For decades, American workers have helped create record corporate profits but have seen their wages hardly budge," the Massachusetts Democrat said in a statement. "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."
Warren's Accountable Capitalism Act would require corporations with more than $1 billion in annual revenue to obtain a new federal charter as a "United Stations corporation," seeking to ensure it would weigh the interests of all stakeholders in decisions.
Those corporations would then have to have at least 40 percent of board members elected by employees.
In introducing the bill, Warren's office cites Germany, which has had worker representation on company boards — called "co-determination" — since the 1970s.
Critics say co-determination can stifle innovation, make companies less efficient, and protect certain entrenched labor constituencies, but U.S. polling commissioned by the liberal group Data for Progress has found that a majority of likely voters would support such employee elections for corporate boards.
Warren's legislation also aims to steer corporations away from focusing exclusively on short-term shareholder returns. The measure, per the statement, would prohibit corporate leaders "from selling company shares within five years of receiving them or within three years of a company stock buyback."
Her bill follows similar legislation from a fellow Democratic senator, Wisconsin's Tammy Baldwin. Baldwin's bill — unveiled in March, and co-sponsored by Warren — would introduce corporate co-determination and seek to rein in stock buybacks.
Warren's measure, which she outlined in a Wall Street Journal op-ed, would also require corporations to obtain approval from 75 percent of shareholders and 75 percent of directors before engaging in political spending.
The bill's introduction comes less than three weeks before the Massachusetts primaries. Three Republicans — Geoff Diehl, John Kingston and Beth Lindstrom — are facing off for the right to challenge Warren in November.
WBUR polling shows Warren with comfortable leads in hypothetical matchups against the three Republicans.
Much of the discussion around Warren, however, has focused on 2020 — not 2018.
Her recent appearance at Netroots Nation, an annual conference for progressives, has added to the chatter of Warren as a top tier Democratic presidential candidate.
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