US, UK Progressive Leaders Aim to Open Corporate Boardrooms to Workers

Sarah Anderson

Sarah Anderson Director, Global Economy Project, Institute for Policy Studies

When corporate directors meet to approve lavish CEO pay packages, nothing can spoil the mood quite like having a rank-and-file worker at the table.

“They get embarrassed,” one worker representative on the board of a major European company told the London-based Centre for Labour and Social Studies.

“Knowing full well that I represent people who’ve had a 1 percent rise in pay for the last five years,” it’s hard for them to award a massive CEO bonus, the worker explained.

Prominent progressive leaders in both the United Kingdom and the United States want to crank up this embarrassment factor by requiring large corporations in their countries to include worker representatives on their boards.

“Decisions taken in boardrooms affect people’s pay, their jobs, and their pensions,” UK Labour Party leader Jeremy Corbyn said as he announced a plan recently to allow workers to select up to 30 percent of board members. “Workers deserve a real say in those decisions.”

On the other side of the Atlantic, U.S. Senator Elizabeth Warren has introduced a similar proposal. Her Accountable Capitalism Act would require corporations with annual revenue of more than $1 billion to allow employees to pick at least 40 percent of board members.

The proposals are popular in both countries. A 2016 poll by the UK Trades Union Congress found that 59 percent of Brits support worker reps on boards of large corporations, with only 10 percent opposed. In a recent poll of likely U.S. voters, 52 percent were supportive and only 23 percent were opposed.

Another commonality: the United Kingdom and the United States have the largest gaps between CEO and worker pay in the developed world. A Bloomberg analysis of CEO pay in 2015 and 2016 at firms of similar market value found that the average pay for U.S. CEOs was $14.3 million. Their UK counterparts came in second, with $7.9 million. Bloomberg found the ratio between CEO pay at these companies and the national average for all workers to be 265 to 1 in the United States and 201 to 1 in the UK.

In Germany, which Senator Warren has pointed to as a “successful” model of worker representation on boards, average CEO pay levels, while hardly stingy, were less than half the U.S. average, at $6.2 million. The CEO-worker pay ratio was also far lower, at 136 to 1.

It’s no mere coincidence that Germany has one of the most highly developed systems of worker participation in corporate decision-making, with the right to hold half of the seats on a supervisory board. In at least a dozen European countries, workers have the right to representation in their company’s top administrative and management bodies.

The benefits of considering workers’ views in corporate decision-making go beyond moderating CEO pay levels. Workers would also be a voice for investing resources in ways that support good, sustainable jobs instead of fixating on short-term profits for executives and shareholders. The current “shareholder primacy model,” writes Lenore Palladino of the Roosevelt Institute, “has driven the deep-rooted economic inequality that we live with in America today.”

Both Corbyn and Warren’s “workers on boards” proposals are part of larger plans to shift the balance of power within large corporations. Corbyn aims to require British companies with 250 or more UK-based employees to transfer 10 percent of shares into a worker-controlled “inclusive ownership fund.” Every year, employees would receive up to £500 (US$659) in dividends, with the remaining revenue flowing into public investment projects.

Warren’s plan would shift power not only by giving workers boardroom seats, but also by obligating those corporate boards to consider the interests of all stakeholders. To get a good performance review, CEOs would have to deliver benefits for workers, customers, and the communities in which they operate — instead of merely maximizing shareholder value. Corporations that repeatedly break labor, environmental, or other laws could have their charters revoked.

Corbyn and Warren insist that giving workers a louder voice would be good for business. Warren points out that as recently as the 1980s, corporations plowed more than half of their profits into building up their business. But over the last decade, as unions have declined, large U.S. corporations have handed 93 percent of earnings over to shareholders, shortchanging long-term investment in ways that reduce their competitiveness.

Corporations “should welcome the expertise and understanding that workers will bring to the company board,” Corbyn told the crowd at his party convention.

Not surprisingly, though, big business is not buying this line. In fact, corporate opposition in the UK is so stiff that Prime Minister Theresa May backed off a similar proposal to require worker representation on boards after campaigning in support of it in 2016.

In the United States, the response to Warren’s proposal has been more muted, but this may change if she becomes a serious contender for presidential power. As Prime Minister May flounders in her Brexit negotiations, British corporate lobby groups have real reason to fear an early election that could put Corbyn in power. In the United States, 2020 still seems a long way away.


Reposted from

Posted In: Allied Approaches

Union Matters

Get to Know AFL-CIO's Affiliates: National Association of Letter Carriers

From the AFL-CIO

Next up in our series that takes a deeper look at each of our affiliates is the National Association of Letter Carriers.

Name of Union: National Association of Letter Carriers (NALC)

Mission: To unite fraternally all city letter carriers employed by the U.S. Postal Service for their mutual benefit; to obtain and secure rights as employees of the USPS and to strive at all times to promote the safety and the welfare of every member; to strive for the constant improvement of the Postal Service; and for other purposes. NALC is a single-craft union and is the sole collective-bargaining agent for city letter carriers.

Current Leadership of Union: Fredric V. Rolando serves as president of NALC, after being sworn in as the union's 18th president in 2009. Rolando began his career as a letter carrier in 1978 in South Miami before moving to Sarasota in 1984. He was elected president of Branch 2148 in 1988 and served in that role until 1999. In the ensuing years, he worked in various roles for NALC before winning his election as a national officer in 2002, when he was elected director of city delivery. In 2006, he won election as executive vice president. Rolando was re-elected as NALC president in 2010, 2014 and 2018.

Brian Renfroe serves as executive vice president, Lew Drass as vice president, Nicole Rhine as secretary-treasurer, Paul Barner as assistant secretary-treasurer, Christopher Jackson as director of city delivery, Manuel L. Peralta Jr. as director of safety and health, Dan Toth as director of retired members, Stephanie Stewart as director of the Health Benefit Plan and James W. “Jim” Yates as director of life insurance.

Number of Members: 291,000 active and retired letter carriers.

Members Work As: City letter carriers.

Industries Represented: The United States Postal Service.

History: In 1794, the first letter carriers were appointed by Congress as the implementation of the new U.S. Constitution was being put into effect. By the time of the Civil War, free delivery of city mail was established and letter carriers successfully concluded a campaign for the eight-hour workday in 1888. The next year, letter carriers came together in Milwaukee and the National Association of Letter Carriers was formed.

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