October 16, 2018

Warren Joins Baldwin, Colleagues in Effort to Give Workers a Greater Voice at Public Companies

Senators Call for SEC to Consider the Merits of Directly Electing Workers to Company Boards

Text of the Letter (PDF)

Washington, DC – United States Senator Elizabeth Warren (D-Mass.) today joined Senator Tammy Baldwin (D-Wisc.) and 11 of her Senate colleagues in calling on the Securities and Exchange Commission (SEC) to use its upcoming Staff Roundtable to consider implementing reforms that will promote worker engagement, drive long-term growth and investment, and give workers a greater voice in public companies by allowing workers to be elected as company board members.

In the letter, the senators note research has shown that company boards with worker representation make better resource allocation decisions, over a longer period of time.

“In developing the roundtable agenda, you asked SEC staff to consider, “Whether meaningful ownership in the company can be demonstrated by factors other than the amount invested and the length of time shares are held.” We strongly believe meaningful ownership can and should be determined by the value of contributions made to the company by its various stakeholders. Workers, for example, invest their time, skill, and effort in the company, and—like shareholders—depend on managers to both generate a return on that investment and share that return in the form of increased compensation,” wrote the senators in their letter.

“Congress has proposed several pieces of legislation to promote worker engagement with corporate management and in the selection of directors. Research has shown that boards with worker representation make better resource allocation decisions over a longer time horizon. Because your agenda seeks a forum for engagement, we believe the SEC’s agenda should include a discussion of the merits of directly electing of workers to company boards,” the senators continued. 

The letter was also signed by Senators Sherrod Brown (D-Ohio), Cory Booker (D-N.J.), Kirsten Gillibrand (D-N.Y.), Ben Cardin (D-Md.), Chris Van Hollen (D-Md.), Bernie Sanders (I-Vt.), Edward Markey (D-Mass.), Mazie Hirono (D-Hawaii), Kamala Harris (D-Calif.), Jeff Merkley (D-Ore.) and Patty Murray (D-Wash.).

In August, Senator Warren introduced the Accountable Capitalism Act to help eliminate skewed market incentives and return to the era when American corporations and American workers did well together.  The legislation contains a provision that empowers workers at very large American corporations to elect at least 40% of Board members.