In recent years, senior Wall Street managers relentlessly pursued short-term profit and personal windfalls by any and all means while bringing Main Street to its knees (where it remains to this day.) Meanwhile, most of the managers remain where they were – comfortably in charge and gazing upon the tents of Occupy Wall Street protesters.
The problem of bad corporate governance, of course, extends well beyond Wall Street, into the executive suites of many non-banking Fortune 500 members. One percipient commentator, Kris Broughton, correctly says occupiers should focus on changing corporate governance. But many people's eyes glaze over when discussions turn to boards of directors, proxy voting rules, managerial compensation packages, shareholder rights, etcetera. And, of course, meaningful reform of law and regulations covering such matters is easily tabled in Congress by corporate interests, or permitted to die on the vine inside the revolving doors of conflicted regulatory agencies.
Given the opportunity, the House of Representatives and all announced Republican presidential aspirants would kill the Dodd-Frank Act as quickly as a hollow-point slug brings down a displaced coyote in Texas. President Obama can issue executive orders and push his cabinet to bring about some change, but a president's reach exceeds his grasp when our legislative branch and his own regulatory infrastructure are more responsive to corporate capital than political capital.
American citizens should follow the lead of commoners in medieval England, where the physical infrastructure of poor roads and communications – rather than immobility caused by corporate money – hindered a king's ability to dispense justice. From at least the 1200s onward, commoners grouped together to bring grievances to English courts of law in what became known as “group litigation.”
In 1960s America, when racial bias immobilized much of the executive and legislative branches on civil rights issues, citizens banded together to bring group litigation (now call “class actions”) in federal courts to force change. Protection of consumers and the environment was similarly propelled by citizen class actions in the 1970s.
Today, class actions aiming to improve corporate governance are led by major public and union pension funds joined by individual citizens who all hold shares of stock in the companies they wish to change. To many occupiers now holding direct actions in the aftermath of their evictions, and to those still encamped in the parks of America's cities, the idea that these institutional investors represent their interests and should be supported may seem remote.
In an interview, Lucas Green, an attorney and a research director for Institutional Investor Services Inc.'s corporate governance unit, helped connect the dots:
“The interests of public pension funds, which are often among the largest investors in any given corporation and which seek effective, honest corporate governance focusing on the long term, are aligned with the public interest in several ways.” said Green. “The beneficiaries of pension funds themselves are individual employees, and the funds can exert a positive influence on securities markets and the economy.”
As an example, Green cites a lawsuit led by the California Public Employee's Retirement System (CALPERS), with about $236 billion in assets, that helped force extensive reform in the way the giant insurer United Healthcare Group Inc. is managed. Amid a 2006 federal investigation into illegal back-dating of stock options to enrich senior United Health managers, a separate 2008 New York State investigation of alleged fraud in United Health's consumer billing and other allegations of fraud in the sale of United Health's securities, CALPERS and other investors pursued a class action against United Health in federal court that, in 2009, won:
- $925.5 million in recoveries for allegedly defrauded shareholders;
- Creation of a more independent board of directors to better oversee United Health managers;
- Reform of United Health executive compensation to discourage wrongdoing.
What can individual citizens do to encourage more such actions? People lucky enough to still be covered by a pension fund can contact their fund's managers and encourage them to become “shareholder activists” and fight for change. And all of us can contact members of Congress and demand they resist ongoing corporate pressure to kill class actions as a legal remedy for society's ills.
Medieval English commoners won a working democracy, and American commoners ought to be able to win one back.
Truthout Is Preparing to Meet Trump’s Agenda With Resistance at Every Turn
Dear Truthout Community,
If you feel rage, despondency, confusion and deep fear today, you are not alone. We’re feeling it too. We are heartsick. Facing down Trump’s fascist agenda, we are desperately worried about the most vulnerable people among us, including our loved ones and everyone in the Truthout community, and our minds are racing a million miles a minute to try to map out all that needs to be done.
We must give ourselves space to grieve and feel our fear, feel our rage, and keep in the forefront of our mind the stark truth that millions of real human lives are on the line. And simultaneously, we’ve got to get to work, take stock of our resources, and prepare to throw ourselves full force into the movement.
Journalism is a linchpin of that movement. Even as we are reeling, we’re summoning up all the energy we can to face down what’s coming, because we know that one of the sharpest weapons against fascism is publishing the truth.
There are many terrifying planks to the Trump agenda, and we plan to devote ourselves to reporting thoroughly on each one and, crucially, covering the movements resisting them. We also recognize that Trump is a dire threat to journalism itself, and that we must take this seriously from the outset.
After the election, the four of us sat down to have some hard but necessary conversations about Truthout under a Trump presidency. How would we defend our publication from an avalanche of far right lawsuits that seek to bankrupt us? How would we keep our reporters safe if they need to cover outbreaks of political violence, or if they are targeted by authorities? How will we urgently produce the practical analysis, tools and movement coverage that you need right now — breaking through our normal routines to meet a terrifying moment in ways that best serve you?
It will be a tough, scary four years to produce social justice-driven journalism. We need to deliver news, strategy, liberatory ideas, tools and movement-sparking solutions with a force that we never have had to before. And at the same time, we desperately need to protect our ability to do so.
We know this is such a painful moment and donations may understandably be the last thing on your mind. But we must ask for your support, which is needed in a new and urgent way.
We promise we will kick into an even higher gear to give you truthful news that cuts against the disinformation and vitriol and hate and violence. We promise to publish analyses that will serve the needs of the movements we all rely on to survive the next four years, and even build for the future. We promise to be responsive, to recognize you as members of our community with a vital stake and voice in this work.
Please dig deep if you can, but a donation of any amount will be a truly meaningful and tangible action in this cataclysmic historical moment. We’re presently working to find 1500 new monthly donors to Truthout before the end of the year.
We’re with you. Let’s do all we can to move forward together.
With love, rage, and solidarity,
Maya, Negin, Saima, and Ziggy