Economic Democracy at Work: Why (and How) Workers Should be Represented on U.S. Corporate Boards

>> Read article published in the Journal of Law and Political Economy

Abstract

Workers should have representation on corporate boards of directors in the United States. Employees are key stakeholders whose contribution is necessary for the success of innovative enterprises. In contrast to the “shareholder primacy” theory of corporate governance, which claims that only shareholders should have decision-making authority, the argument made here is that also granting employees a voice on the corporate board will have positive effects for employees and the company as a whole. Yet implementing such a reform in the twenty-first-century US context is not simply a matter of importing a European model. Effective policy design requires consideration of the US workforce structure and the important prohibition on employer-dominated organizations in US labor law, and developing appropriate mechanisms for worker-director election, representation, and worker organization. Worker representation on boards will not be effective in a vacuum, but is an important component of overall reform efforts to strengthen the US economy.