The letter requests that Mr. Dimon publicly disclose what tangible actions he will take on behalf of JPMorgan Chase to implement the principles outlined in the statement and notes Sen. Warren’s expectation that the Business Roundtable (BRT) should support her Accountable Capitalism Act (S. 3348). The letter states that in the early 1980s, less than half of corporate profits at the largest companies went to shareholders; however, by 2015, that portion had risen to more than 90%.
The four major requirements of the Accountable Capitalism Act as introduced last Congress include:
- American corporations over $1 billion (both public and private) must obtain a federal charter;
- Worker representatives must comprise 40 percent of board directors;
- Directors and officers must hold their shares for at least five years; and
- U.S. corporations must obtain shareholder and board approval for all political expenditures.
Sen. Warren requests “concrete steps,” in writing, on how Mr. Dimon and the other signatories will achieve the following commitments made in their Statement:
- Delivering value to customers by meeting or exceeding customer expectations;
- Investing in employees, compensating them fairly, providing important benefits, and supporting them through training and education;
- Dealing fairly with suppliers and serving as good partners to other companies;
- Supporting people and communities while protecting the environment through sustainable practices; and
- Generating long-term value for shareholders while committing to transparency and effective engagement with them.
Outlook. While the BRT statement generated significant press, it is not clear how the statement works in practice. Will boards make a case to shareholders that they need to accept lower returns in order to meet the needs of another stakeholder? How will results be quantified and reported? Will compensation be tied to any new metrics? What role should legislation and regulation play in establishing a holistic stakeholder corporate governance model, if any? Or, are many of these concerns already incorporated in a long-term shareholder return corporate focus? As the debate evolves, companies may need to consider these questions moving forward.