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Quarterly Market Insights - Shareholder vs Stakeholder

Christopher LaPorta

October 23, 2019

Do the rules by which U.S. corporations govern themselves need an overhaul? 

Calls for reform of corporate governance structures in place for decades have increasingly made headlines in 2019. 

The Accountable Capitalism Act, introduced in August 2018 by leading Democratic presidential candidate Senator Elizabeth Warren, is at the front line of this debate. Warren describes her legislation as designed to push corporations toward business decisions that are considered socially advantageous and supportive of the American middle class. 

Her proposals include a mandate that U.S. corporations with more than $1 billion of annual revenue ensure that at least 40% of corporate directors are selected by employees. Implementing this would dramatically alter the corporate board construction process currently decided by exclusively shareholder votes.

Depending on who wins the Democratic presidential nomination, the 2020 election could prove to be a fascinating testing ground for how strongly American voters feel either way about these issues.

Learn more in our Quarterly Market Insights.