Capitalism: Solving for Equity and Ethics
Editor’s note: This is the fourth of a five-part series examining the Capitalism Problem and what everyone needs to know about its shortcomings and opportunities. To read the series from the beginning, click here.
Since capitalism touches so many areas of economic and personal life, crafting solutions to address the disparities in incomes and ethics is challenging.
The most vulnerable stakeholder is employees-as-citizens, so a shift needs to occur to better balance the power and outcomes between key stakeholders. Solutions can be implemented that include employee representation on boards of directors, align tax policy to improve CEO-to-worker compensation ratios, and begin reporting on corporate social responsibility (CSR) programs.
Employee Representation on the Board of Directors
Employees are vulnerable stakeholders, and this can begin to change by adding their voice to a company’s board of directors. Germany is one country that sets an example in this area. Since 1951, German laws required companies to have employees on the board of directors.
While the ideal employee representation is less than 50 percent of the board, the proper employee representation adds monitoring of privileges and creates a two-way communication channel between…
