In light of Kos's post about "libertarian Dems"- which specifically mentioned that a libertarian Democrat recognizes that sometimes individuals need protection from corporations- I would like to make a proposal. I think it is time to create a new legal class of corporation- the
stakeholders' corporation.
Currently, there are different classes of corporation- the C class, the S class, the limited liability corporation, etc. The differences are fairly minor, and not every state will incorporate each type of corporation, but they all have one thing in common: they legally exist to make a profit for shareholders. Not for stakeholders- which includes shareholders, plus employees, customers, and the communities in which the company does business. No, only for shareholders.
You have probably heard this line before- "corporations are required to maximize shareholder value"- i.e., to make as much damn money as possible, no matter the cost to everyone else involved.
This is why it is so important that a new class of corporation be formed- the "Stakeholding" class. A stakeholder corporation would be required to maximize stakeholder value. Thus, each stakeholder corporation would be required to give every stakeholder- shareholders, employees, customers, and communities- a minimum amount of voting power and/or a share of the profits and losses. For example, employees might get a minimum of 20% of the votes/obligations, divided up by person, proportion of hours worked, or by responsibility. Customers would get X number of votes/obligations per purchase, meeting or surpassing a minimum of say, 10%. And communities might get a minimum of 20% of votes, with votes being cast by council members or local citizens (and any profits would enter the treasury through taxes- which wouldn't be as easily evaded under this scenario).
The advantages of this would be numerous. Most obviously, if the "bottom line" no longer becomes solely about money, or pleasing people who primarily care about money, you are going to get some very different results. A stakeholder corporation would be more responsive to the whole range of needs of its employees, its customers, and its community. This kind of corporation would not be required to pollute its environment, demean its workers, condescend to its customers, or play off one community against competing communities.
Someone might ask- This sounds nice, but why would someone want to incorporate their business as a stakeholding? Well, first of all, nobody would be required to incorporate as a stakeholding- if they wanted to use one of the profits-come-first classes, they could still do so. But would the stakeholding class ever get used? Yes, it would. It would be used by people like this audience, who care about their employees, communities, and customers, and most importantly, their conscience- the real thing of value. Despite what some fatcats might believe, money isn't everything to everyone, and some business leaders would like to be free of the requirement that profit be their bottom line. I think there are many private corporations and socially responsible companies which would eagerly jump at the opportunity to reincorporate in accordance with their ideals.
And not surprisingly, in some cases it would be even more profitable than the other corporate classes. People who feel they have a stake in the outcome of a company's production, will do their best to help improve that outcome. Customers would be more willing to make suggestions to improve the products, and more likely to buy products from companies they have a stake in. And communities would be more cooperative, and perhaps offer more tax breaks and incentives, to companies they know for sure will be responsive to their needs as well. Obviously employees would bring more of their talents to bear on any enterprise that rewards them not just for their work, but also for its value. And just as "Made in the USA" is a selling point to American customers, because we all have a stake in how America does, companies could advertise their stakeholding status as a main selling point.
In so many ways, people have been trying to achieve this dream- the dream of the responsive corporation. They've done it through "socially responsible investing", through trying to "buy local" or "buy blue", the decisions of individual people to not work for companies that don't fully value them or their work, and by the attempts of communities to lure companies for their employment by using tax breaks and other incentives. These are all wonderful and good, but I feel it is time to directly get at the root of the problem- the requirement that corporations only exist to please one group of people, and nobody else.
We all have a stake in this. Now, what do YOU think? :)