Sen. Elizabeth Warren took JPMorgan Chase CEO Jamie Dimon and the Business Roundtable to task in a new interview with CNBC’s John Harwood published on Monday over the business association’s August commitment to “redefine” the purpose of a corporation to extend beyond the maximization of shareholder profits.
“If Jamie Dimon thinks it’s a good idea for giant corporations like JPMorgan Chase to have multiple obligations, he and I agree. Then let’s make that the law,” Warren said. Dimon is the chairman of Business Roundtable’s board of directors.
Warren, one of the top contenders in the Democratic presidential primary, suggested that the business association’s move to do away with the notion of “shareholder primacy” was inspired by her proposal to rein in the power of big business.
The Massachusetts Democrat introduced a bill to require the nation’s largest companies to consider stakeholders like their customers and employees a year before the Business Roundtable released its statement, signed by 181 CEOs, calling on businesses to do the same.
“You think you caused them to make that decision?” Harwood asked Warren in the interview.
“Well, all I’m saying is that’s what happened first,” Warren said. “There was a lot of conversation about it, and then Jamie Dimon and the heads of some other very large corporations said, ‘Oh, we don’t need a law. We’re just going to make that change voluntarily.'”
The Accountable Capitalism Act would require companies with more than $1 billion in yearly revenue to obtain federal charters from a newly created Office of United States Corporations. It would require 40% of corporation directors to be selected by employees and add new restrictions on stock sales by directors and officers.
Warren said that she did not believe voluntary measures will work.
“They’ll say they’re going to do it on their own, and they may make some adjustments,” Warren said. “But understand this: There’s a reason you put laws in place. Because the one who doesn’t follow voluntarily is the one who then gets a little short-term comparative advantage, gets to boost the share price just a little bit.”
“You put in rules so everybody competes on a level playing field,” Warren said.
Warren is a longtime consumer advocate and the architect of the Consumer Financial Protection Bureau, a regulator established in the wake of the 2008 financial crisis. Unlike primary rival Sen. Bernie Sanders, I-Vt., who calls himself a democratic socialist, Warren self-identifies as a capitalist, but is a strong proponent of effective regulations.
Warren is in third place in national surveys after dropping behind Sanders in the polls last month. Former Vice President Joe Biden is the front-runner.
The Business Roundtable did not immediately respond to a request for comment.
