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Corporate Citizenship Initiatives harvested from Issues page of Candidate John Bonifaz[]
The Secretary of the Commonwealth (Mass) oversees and administers the corporate law of Massachusetts. With this responsibility comes great potential for progressive reform of Massachusetts law. Corporations can exhibit better corporate citizenship, be made more accountable to the public and more responsible to the concerns of all of their stakeholders – including shareholders, employees, the community and the environment. The following are seven initiatives that I will advance as Massachusetts Secretary of State to encourage greater corporate citizenship for our Commonwealth.
1. Enforce Massachusetts’ Right to Govern Massachusetts Corporations[]
Many companies based in Massachusetts and employing thousands of our residents are incorporated in Delaware. Under the so-called Internal Affairs Doctrine, Delaware claims the right to govern the internal affairs of companies incorporated there, regardless of where they actually do business. This is to Delaware’s advantage as incorporation fees provide 25% of its state budget. Some of Massachusetts’ largest employers, including Raytheon and Stop & Shop, are based in Massachusetts but incorporated in Delaware, where they have little involvement. Massachusetts should assert its right to provide the corporate governance rules for corporations based here or having most of their employees here. The citizens of Massachusetts – not the citizens of Delaware – should provide the laws governing Massachusetts corporations.
2. Establish “Responsible Business Corporations”[]
Create a new class of Massachusetts corporation – the “Responsible Business Corporation” – that can earn state benefits in return for including employees and public interest representatives on its Board of Directors. The Boards of Directors of Massachusetts corporations are presently elected only by the shareholders. A “Responsible Business Corporation” would have directors that represent the interests of its employees and the public. In return for having a “Stakeholder Board,” the corporation would receive certain benefits, including advantages in state contracting and purchasing, as well as potential exemptions from a portion of state corporate taxes.
3. Establish a Small Business Task Force[]
Create a task force to examine and address the challenges facing small businesses in Massachusetts today. As the lifeblood of our economy, small businesses will be a key area of focus within the Corporations Division in an effort to make operating in Massachusetts more feasible and profitable. A thriving small business sector is essential to the future growth of the Commonwealth.
4. Require Public Interest Decision-Making[]
Executives of large Massachusetts companies would be required to consider the public’s interests in important decisions that affect the public. Under current law, directors may consider the interests of the company’s various stakeholders, including employees, customers, the public, and the state. The law should require directors of large corporations to consider the interests of these stakeholders. Connecticut law already contains such a requirement. Massachusetts should as well.
5. Advance Employee Protection[]
Like shareholders, employees should be able to sue if companies lie to them. Numerous state and federal laws make it illegal for companies to lie to shareholders, yet companies can lie to employees with near impunity. Employees are hurt at least as much when companies lie to them about the impact of a merger or the likelihood of a plant closing. Massachusetts must require companies to tell the truth to both shareholders and employees about important matters.
6. Ensure Corporate Tax Accountability[]
Corporations often report profits to their shareholders and issue dividends accordingly. Yet, at the same time, they will report no profit on their tax forms and avoid paying taxes. According to a 2005 report by Citizens for Tax Justice and the Institute on Taxation and Economic Policy, during the years 1989-2003, Massachusetts tax revenues from corporations – expressed as a percentage of the gross state product – fell 48%. There should be a presumption that it is fraudulent for corporations to report different profits for different purposes. Massachusetts should require corporations to explain the differences in accounting and to pay taxes on their real revenue.
7. Create an Election Day Holiday[]
Beyond providing time off to vote, corporations should establish an Election Day corporate holiday and provide incentives that would encourage employees to serve as poll workers -- so as to increase assistance to voters and ease the burden on our cities and towns to recruit new poll workers. The encouragement of employee civic participation by corporations is vital for our communities and our democracy.