Taming the Corporate Leviathan: Codetermination and the Democratic State

76 Pages Posted: 27 Aug 2020

See all articles by Jens Dammann

Jens Dammann

University of Texas at Austin - School of Law; European Corporate Governance Institute (ECGI)

Horst Eidenmueller

University of Oxford; European Corporate Governance Institute (ECGI)

Date Written: August 12, 2020

Abstract

Two prominent progressive senators, Bernie Sanders and Elizabeth Warren, have recently proposed that employees should be allowed to elect 40 to 45 percent of the directors of large corporations. If implemented, such a reform would bring U.S. corporate law substantially closer to European countries like Denmark, Germany, and Sweden, where worker codetermination has long been a central feature of corporate governance.

An extensive body of theoretical and empirical scholarship analyzes codetermination’s economic impact on corporations and their employees. This Article focuses on a different issue. It examines codetermination’s potential for protecting our democracy against the dangers inherent in the accumulation of extreme wealth and power by private corporations.

Concentrated corporate wealth creates the risk that corporations will use their resources to undermine democratic institutions. This Article argues that codetermination can mitigate this risk by splitting corporate voting rights between shareholders and employees, thereby playing a role that is broadly similar to that of the Constitutional separation of powers.

Keywords: Codetermination, Corporate Governance, Democracy, Corporate Power, Anti-Domination Principle

JEL Classification: K2, K31, L2, L5

Suggested Citation

Dammann, Jens and Eidenmueller, Horst G. M., Taming the Corporate Leviathan: Codetermination and the Democratic State (August 12, 2020). European Corporate Governance Institute - Law Working Paper No. 536/2020, Available at SSRN: https://ssrn.com/abstract=3680769 or http://dx.doi.org/10.2139/ssrn.3680769

Jens Dammann

University of Texas at Austin - School of Law ( email )

727 East Dean Keeton Street
Austin, TX 78705
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://https://ecgi.global/users/jens-dammann

Horst G. M. Eidenmueller (Contact Author)

University of Oxford ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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