Florida Sen. Marco Rubio has introduced a bill to “enable shareholders to hold woke corporations accountable” by equalizing the playing field in the ways publicly traded companies serve or fail to serve the public that owns it. The “Mind Your Own Business Act” is a bill that would empower shareholders with the ability to successfully sue a corporation if the corporation is behaving in “woke” ways that undermine its “fiduciary duty” to the shareholders. These include advertising campaigns that have nothing to do with a corporations product or service and everything to do with a sociopolitical agenda and corporate boycotts of states and industries for non-financial reasons.
This sort of fighting back against the corporate elites that go against what their shareholders want of them is long overdue, but up until recently, it has been extremely difficult for a middle class shareholder to voice their concerns to corporate management as many don’t even use their shareholder rights to vote to change corporate leadership. As Sen Rubio noted in an op-ed for Fox business:
If you own a stock, invest in a mutual fund, have a company-sponsored 401k, then you are a shareholder and are owed legal duties by the corporations you invest in. The truth is that corporate executives keep you in the dark about your right to hold them accountable for how they spend your money.
Technically it has always been legal for a shareholder to sue over this mismanagement in a company, but the process is nearly impossible to complete or get a ruling because – surprise! – the corporate elites who write the rules have continually added labyrinths that make the process virtually impossible to navigate. As Rubio notes:
Under current law, a shareholder has the right to sue corporate officers when they take actions like these that are motivated by their politics rather than your financial interests. But corporations have stacked the deck to make these lawsuits hopeless. They tweak provisions in their bylaws to protect themselves as they leave America behind.
The solution is simple: these large, publicly traded companies must provide a clear path forward for shareholders when they sue in response to these actions. My bill would put the burden of proof on the company to show that these actions were in shareholders’ best interests, and make corporate officers personally liable if they can’t prove it.
No more legal tricks that shield these corporate executives from accountability. If they really believe that being woke is good for business, they should have to say so—and prove it—under oath in court.
In effect, this is a corporate-America way to achieve the Communist dream of a utopia that at least moves closer to a truly worker-owned economy. Financial firms are supposed to be accountable only to shareholders and exist only for maximizing shareholder value and if you don’t like it then you can become a shareholder and vote for the corporate direction the company should be taking in your estimation, or, if your vote fails, you can sell your shares and not buy from the company. Facilitating this end only helps the system be more of what it is designed to be, so everyone should be in favor of it, right? The problem is that the most powerful groups in the country don’t want the system to be what the system is supposed to be, so “woke capital” has been the way they’ve tried to change it.
American Compass in a piece titled Woking 9 to 5 (heh) shows the results of what people think about wokeness on behalf of corporations in a survey of workers (and for those without a traditional employer they asked about business in general) to determine the publics actual desire for businesses to skew woke.
In their adoption of “progressive” agendas, both unions and corporations have ignored entirely the preferences and interests of workers. (Whether an agenda that abandons workers can rightly be called progressive is a question for another day.) Not What They Bargained For, the American Compass survey of worker attitudes, highlights the ways that the labor movement’s focus on progressive politics has undermined its own popularity and alienated the lower and working classes. Workers similarly disdain “woke” employers.
Specifically they asked: “In recent months American companies have taken public stances and made business decisions that they say advance social justice, on issues such as election reform, racial equity, and LGBTQ+ rights. Thinking about your own employer, which of the following best represents your own view.”
Large majorities want businesses to “focus on business and stay out of social justice issues.” There is one segment of workers who go against the majority and want more wokeness:
Oren Cass summarizes:
As corporations and unions have found common cause advancing social justice—or perhaps, more accurately, as both have fallen under the control of the same set of managerial-class graduates of the same set of universities plying a common social justice dogma—it is both shareholders’ and workers’ interests that get snubbed, and both who would benefit from businesses getting back to business.
A well-functioning capitalist system requires that managers consider many obligations beyond those to shareholders, which a business can fulfill in its operation as a business: treating workers well and offering employment that allows them to support their families; investing in the long-term sustainability of the firm itself and the surrounding community; promoting the nation’s prosperity. Getting co-opted by political activists is not on the list. Asking shareholders to help in policing such behavior may somewhat incidentally accrue to their own benefit, but the benefits to society will be much larger. It is precisely the role of policymakers in a market economy to craft rules that encourage capitalists to advance their own interests in ways that advance the common good as well.
For now, the the legislation’s going nowhere under a Democrat-controlled Congress and White House, but it is good signaling by Rubio who is up for reelection next November and if/when Republicans take back congress in the 2022 midterms, this is a good direction to alert supporters that the party would be going in.