The economic headlines are chock full of soaring corporate profits, booming CEO pay, and record share buybacks.1 Yet, America’s working families and communities are struggling to get by since wages and family wealth have barely budged after decades of stagnation. This is a dangerous situation, as the deep imbalances in how the U.S. economy works—and whom it fails to work well for—increasingly expose America to social and political division.
This issue brief explores why companies share their benefits overwhelmingly with those at the top, leaving little for working families. It discusses why this is the case and what can be done to shift corporate accountability and governance so that economic growth is genuine, lasting, and more equitably shared with working families.
A shift in corporate governance
The boards and managers running companies, especially public companies, respond to the stakeholders who have the power to make demands of them.2 Stakeholders include the consumers who buy their products and services; workers and suppliers who produce them; investors who provide capital and other know-how; and even communities who provide a clean, safe environment and educated workers.3 However, boards and managers have been implementing corporate governance strategies that prioritize Wall Street and corporate executives, over the rest of the stakeholders. Why are America’s companies so responsive to some stakeholders, to the detriment of others?