The Stakeholder Strategy
Changing corporations, not the Constitution, is the key to a fairer post-Citizens United world.
Including broader stakeholder concerns at the senior level of corporate decision-making will help roll back the pervasive short-termism of corporations. Stakeholders in general, and employees and communities in particular, know their interests are not well served by fetishizing the short term. They hope to have their jobs and their neighborhoods for more than a year; they are unwilling to assume away risk when they are the ones who would bear the costs if those risks play out badly. A more technical way of describing this is to say that there is less moral hazard with boards that include a diversity of interests—people don’t play with fire when it’s their own house that will burn.
Taking the Supreme Court at Its Word
But the final and most important reason to make companies more pluralistic is to make corporations more reflective of democratic norms and principles. Corporations have immense power over our lives, and not only because of the goods and services they sell, the jobs they provide, and the financial gains they contribute to our retirement funds. They also dominate our political world—and here John Bonifaz and his colleagues are correct—because they have access to lawmakers that few individuals can match.
We could address the errors of Citizens United from the constitutional side, but that would certainly be a long shot. The Constitution of the United States is one of the most difficult to amend in the world. A more viable option is to address the errors of Citizens United from the corporate side. Essentially, we could take the Court at its word, and seek to make corporations themselves more like “associations of citizens.” This too may seem a long shot. In a sense it is—if only because it would require a profound change in how we conceptualize corporations, from pieces of property owned by a sliver of the financial elite to collective enterprises benefitting from the contributions of a variety of stakeholders. But once the conceptual change takes hold, the legal adjustments are straightforward and much less demanding than a constitutional amendment. A national corporate governance law would require a vote in Congress followed by a presidential signature. In fact, a national law need not be the first step. As described above, many of these changes could take place one state at a time. States would just have to resist Delaware’s dominance and assert the authority to govern the corporations based in their own jurisdictions.
As the governance of corporations begins to take account of the interests of their stakeholders, the public voice of corporations would reflect the voices of those myriad stakeholders. Corporate involvement in the political process would be less of a concern, because it would be more reflective of the range of stakeholders contributing to company success. It would be less “them” and more “us.” There is nothing inherently undemocratic in corporate speech, unless corporations themselves are undemocratic.
Citizens United recognized the corporate right to speak in the American public square. Currently, that poses a major problem for our democracy because corporations amplify the voices of a tiny number of the financial and managerial elite—the notorious 1 percent. If companies gave voice to a more diverse and pluralistic set of interests, the fact that corporations speak would not undermine democracy. On the contrary, corporate speech would reflect it.
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