Democratizing the economy, promoting employees autonomy and equal stakeholders citizenship in corporate governance: a policy proposal

The corporate governance doctrine of shareholder value primacy was one of the main determinants of the devastating increase of unacceptable inequalities in most developed countries during the last thirty years. This suggests to consider corporate governance as a matter of social justice before than efficiency. Reforms have thus to be viewed in the perspective of pre-distribution - viz. the pre-distribution of rights, capabilities, and powers that non-financial corporate stakeholders should be granted in order to influence the process of creation and initial distribution of wealth and income. In particular, the policy proposal suggested in this paper is the introduction of what we call Works and Citizenship in company Councils. It innovates with respect to similar experiences in European countries (viz. Germany and the Nederland) by including in the Council all the employees related to a given company, independently on their labor contracts, also allowing participation of workers included in the supply chain or in the business network of a main company. It moreover introduces the participation of external stakeholders like consumers and local communities affected by the company’s environmental externalities. Councils would have legal rights/powers of consultation on all the corporate strategic decisions and a co-determination power (veto power) on all the decisions of direct interest for employees. This allows them an intervention "in good time" on the formation of the corporate strategies and thus can be seen as complementary to Unions-Management negotiations at company level.

Keywords: Inequalities, pre-distribution, corporate governance, social justice, co-deteremination, worker authonomy, stakeholders, shareholder value, works council, equal citizenship.

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