v4 n6 Barbeau on Moriarty on Democratic Corporate GovernancePosted: June 2, 2016 Filed under: Uncategorized 1 Comment
“Deliberative Democracy and Corporate Governance” by Aimee E. Barbeau
A COMMENTARY ON Jeffrey Moriarty (2014), “The Connection Between Stakeholder Theory and Stakeholder Democracy: An Excavation and Defense,” Bus & Soc 53(6): 820–852. http://dx.doi.org/10.1177/0007650312439296
Jeffrey Moriarty argues for a return to a robust notion of stakeholder theory involving direct procedural voting by stakeholders. He asserts that such voting offers the best possible chance of restraining firm behavior and taking into account all stakeholder interests. I argue, however, that Moriarty proceeds with an overly narrow conception of democracy, ignoring problems that arise from procedural voting. Specifically, paradoxes in voting procedures, the tyranny of the majority, and the inefficacy of representation advantage well-organized and moneyed interests. A stakeholder democracy may in fact undermine the very interests that Moriarty seeks to promote.
To download the full PDF, click here: Barbeau on Moriarty
I am curious as to what Aimee Barbeau means by works councils. Since she is arguing against Moriarty’s concept of stakeholder democracy, I assume that she does not mean mandated worker representation as in Germany. Employer-sponsored works committees are prohibited under US labor law as a form of company unionism. Employees seeking input into employer-decision-making in the 1920s and 1930s discovered in many cases that employer-managed plans practiced top-down control rather than bottom-up responsiveness. Several of these structures were actually taken over by workers and turned into independent industrial unions.
In the 1990s, employer groups sought labor law reform (the TEAM Act) in order to lift the ban on company unionism. The Labor Policy Association (now the Human Resource Policy Association) argued that this was a means to worker empowerment. Representative Jim Moran from Virginia proposed a compromise: the legalization of employee committees with the stipulation that employees elect the leadership. The advocates of the TEAM Act responded that this amendment would be fatal to the purposes of the proposed legislation. The ban on employee committees / company unions still stands.
Given this legal history, what sort of works council should we be reconsidering?
Thanks to Aimee Barbeau for her very provocative paper and to BEJR for this forum.