On August 15, 2018, U.S. Senator Elizabeth Warren of Massachusetts introduced proposed legislation, the Accountable Capitalism Act, in the U.S. Senate. The legislation would require all U.S. corporations with $1 billion or more in annual revenues to obtain a federal charter as a “United States corporation” and would obligate corporate directors to consider the interests of all corporate stakeholders in their corporate governance activities. [1]

That same day, Senator Warren presented an opinion editorial in The Wall Street Journal citing her rationale. Senator Warren opines that shareholder primacy, a corporate governance concept, has shortchanged American workers since the early 1980s with wage stagnation (despite corporate productivity increasing over the same period). Senator Warren believes the proposed legislation will shift American companies to a “benefit corporation” governance model. This is where corporate directors will be required to consider all corporate stakeholders—employees, customers, shareholders, communities—in company decisions or be subject to the threat of shareholder suits. [2]

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