Empowering Employees 2021 through workers on boards, workers councils, director liaisons, and/or ESOP trusts. Help us move to more democratic workplace cultures.
We have filed shareholder proposals at several companies in an effort to extend at least some token form of democracy to the workforce. Proposals were also used as a basis to file petitions at YourStake.org. Many shareholders work with financial advisors who can access YourStake’s powerful tools to hold corporations accountable. The combined savings of many citizens make up the majority of investment into big companies. Companies already respond to big investors. Now they can respond to you. Ask your advisor to support our proposals and petitions.
Please help ensure we at least start moving in the direction of more democratic corporate governance. Support our shareholder proposals.
Empowering Employees 2021 YourStake Petitions/Shareholder Proposals
Empowering Employees 2021 Rationale
Our proposals formally seek to have the initial pool of candidates for new director nominees include non-management employees. Anticipated benefits include:
- Reduced turnover as employees are more empowered to make firm-specific investments
- Better informed decision-making because employees have specialized knowledge
- Better monitoring of management with increased information channels
- Reduced shareholder myopia, since employees often take a longer-term view
Below are some articles explaining why empowering employees in governing a corporation is important:
- Worker Representation on US Corporate Boards
- Pros and Cons of Including Employees on Your Board of Directors
- Is there a Seat for Employees in U.S. Boardrooms?
- Why you should Consider Having Employees on Your Board
We are open to negotiations. Our proposal references the UK Corporate Governance Code, which provides companies there with several options, other than workers on boards. We are happy to explore these with companies and offer to retract proposals where companies agree to take steps to more democratic workplace cultures. Learn more about the advantages of empowering workers, read the footnotes in the proposal, and the following discussion papers from KPMG:
- Bringing employee perspectives into the boardroom
- Workforce Directors
- Workforce advisory panels
- Designated NED
- What to consider if appointing employees to boards in the UK (many of the same considerations apply in the US)
- Recent Review of Corporate Governance Reporting 2020 by the UK FRC, specifically pages 30-35
Empowering Employees 2021 ESOP Trust
Alternatively, boards could empower employees through an ESOP trust. In Silicon Valley and the Quest for a Utopian Workplace, Christopher Mackin notes that collective bargaining rules were adopted in the 1930s for an industrial workforce. “The legal requirement placed upon unions to strictly follow the interests of a narrow bargaining unit is particularly corrosive to the cause of providing a collective voice at work.”
Stock option plans are compensation plans, not a tool for collective voice or power-sharing. However, an ESOP trust can “proactively include employees in the affairs of companies as organizational citizens.” Wealth sharing should be combined with voice.
Founders of many Silicon Valley companies began with high ideals. Many set up dual-class structures to avoid problems associated with shareholders focused on short-term profits. Unfortunately, those structures ultimately mean rule by an individual or oligarchy. When the Capitol was recently invaded by Trump followers seeking to overturn democratic elections, Facebook, Twitter, and others began to reassess the danger of oligarchs. As Mackin notes,
Company founders can continue feudal-like traditions and pass on the ownership and governance of their companies to a select few, or they can set in place institutional structures that would allow the cultivation of a genuinely democratic workplace culture that breaks free from the human rental relationship that stains so much of the modern economy.
Here, a much-neglected philanthropic fact also needs to be surfaced. The most significant charitable gift that wealthy business founders can realize lies hidden in plain sight: in the community of largely disenfranchised workers and managers whose original efforts helped to create the founder’s fortune. The disenfranchisement of wage and salaried employees can be reversed by installing permanent employee stakeholder trusts.
Comments are closed.