The Rise of the Working Class Shareholder: An Application, an Extension, and a Challenge
15 Pages Posted: 6 Dec 2019
Date Written: December 4, 2019
One of the enduring debates in corporate governance scholarship and doctrine is, to borrow a phrase, for whom are corporate managers trustees. Should corporations be managed primarily to serve shareholder interests or to serve a more robust set of stakeholder interests? That debate has ebbed and flowed over the last century, with some commentators arguing that we are in a historical moment when it is again salient. For corporate governance scholars, this debate is the intellectual equivalent of the divide between the Red Sox and the Yankees. You find your tribe early in your sentient life, and no amount of persuasion, argument, or data will move you. The battle lines are intransigent.
Professor David Webber’s new book, The Rise of the Working-Class Shareholder, is especially valuable given this intransigence. Webber turns our attention to the vast, largely untapped power of the trillions of dollars parked in employee pension funds. Because of these assets, labor can press their interests vis-à-vis corporate governance within a shareholder primacy framework. The intransigence is immaterial. One does not have to convince policy makers to expand the board or to broaden the notion of fiduciary duty to include a consideration of employee interests. All that is required is for labor to assert its collective power as owner of capital.
This article provides a review and analysis of David Webber's book, with ideas on how to extend his points, and a challenge to one of his underlying assumptions with regard to the impact of Citizens United v Federal Election Commission.
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