Last week, progressive icon and noted corporate critic Senator Elizabeth Warren (D-MA) announced an exploratory committee for her candidacy for President in 2020 likely signaling that corporate governance and accountability will be front and center for her in the 2020 campaign. Senator Warren's announcement speech touched on many of the themes she has focused on in the past year, including growing wealth disparity and an exclusion of the american worker and middle class. With Warren's presence in the 2020 campaign, four specific issues are likely to be major themes - at least on the Democrat side in the near term:
- "Accountable" Capitalism: In 2018, Senator Warren introduced the "Accountable Capitalism Act" which would federalize corporate charters for large companies (as opposed to being incorporated in a state) as well as set standards of corporate conduct and mandate companies adopt as a corporate purpose creating a public benefit which makes a positive impact on society. Notably, Warren's bill also included mandatory five-year holding periods for executive equity compensation as well as a prohibition on political spending without 75% shareholder approval. As the Center has previously noted the bill has no chance of passing and the primary goal is aimed at further promoting Sen. Warren's priorities.
- Stock Buybacks: Sen. Warren has been a primary critic of company share buybacks, and she has derided corporations for buying back shares in lieu of reinvesting into other areas, including their employees. Buybacks, according to Warren are a tool also used primarily to enrich executives. On the campaign trail, Warren may focus on buybacks as part of a liberal-populist pitch aimed at appealing to segments of the blue collar population which voted for President Trump in 2016. From a policy perspective, Warren would remove the ability of companies to do buybacks by removing securities laws protections which insulate companies which conduct buybacks from liability from the short-swing profit rules.
- Worker Representation on Boards: Worker representation on corporate boards has been a subject of legislation by Senator Warren, who introduced legislation in 2018 which would have given workers the right to vote for two-fifths of a company's board. As a recent New York Times opinion piece points out, worker representation on boards is used in Germany and, given the growing focus on human capital, there could likely be a push here in the United States. Warren would certainly lead on this issue.
- Pay Equality and Representation: A cornerstone issue for all Democrats is pay equality and representation parity. Warren will likely make this a cornerstone issue in her campaign given her emphatic support for the issue as well as related issues - like workers' rights - in the past.