21st Century Corporate Governance: New Rules For Worker Representation On Corporate Boards
Above Photo: From Rooseveltinstitute.org
Adding workers to corporate boards is a modest reform that gives workers more say in how the corporations they work for behave, including how they treat workers. While this is a positive step it is insufficient, much more is needed. The capitalist system is the root of the problem and this proposal does not strike at that root. KZ
In a new working paper, Roosevelt Senior Economist and Fellow Lenore Palladino argues that the 21st century American economy requires a new, more accurate, and more effective model for corporate governance—one that can advance worker power and employee representation within American corporations and curb inequality. As it stands, outsized shareholder power is contributing to rising economic inequality; and workers have no part in the decision-making that determines the future of the corporations they work for, nor do they have a say in what happens to the value they help create.
In “21st Century Corporate Governance: New Rules for Worker Representation on Corporate Boards”, Palladino outlines stakeholder governance, specifically focusing on the proposal to give workers a voice on the job by extending their representation on corporate boards. She then explores new rules—that is, more progressive policy choices—that can move us toward a more equitable corporate America and ultimately a stronger economy.
Notably, Palladino takes a deeper dive of the policy and legal implications of a new corporate governance model in the US. Policy considerations include how workers should elect worker-directors; who counts as a worker for those elections, and who is eligible to serve on the board; what kind of organizational mechanism worker-directors should have to adequately represent workers; and what rules should govern the board participation of worker-directors.