Ralph Nader's 12 points for Corporate Reform

1) Rein in excessive executive pay. Require shareholder authorization of top executive compensation packages. A mandatory vote should be required for the top three and any other executives whose total compensation is above $1 million. Eliminate tax deductions for compensation above 25 times the compensation received by the lowest paid worker in a corporation.

2) Strengthen corporate governance. Grant shareholders the right to democratically nominate and elect (including through the use of cumulative voting procedures) the corporate board of directors and approve all major business decisions such as mergers and acquisitions above $1 billion in value.

3) Repeal the Private Securities Litigation Reform Act of 1995. Repeal this loss of investor rights that allowed the aiders and abetters of corporate crime (such as accounting and corporate law firms) to escape civil liability.

4) Ban corporate criminals from government contracts. Enact a tough debarment statute that would deny federal business to serious and/or repeat corporate lawbreakers.

5) Strengthen pension reforms. Enact strong pension reforms to improve upon those now being discussed in Congress. At a minimum we need to give workers a voice on the pension board; not require workers to stuff their 401 (k) plans with company stock; and give workers a right to vote for their 401 (k) stock. In addition, an Office of Participant Advocacy should be created in the Department of Labor to monitor pension plans.

6) Regulate derivatives trading. Regulate all over-the-counter financial instruments, including derivatives, so that they are subject to the same or equivalent audit and reporting requirements as other financial instruments traded on the stock exchanges. Rules should be enacted regarding collateral-margin, reporting and dealer licensing in order to maintain regulatory parity and ensure that markets are transparent and problems can be detected before they become a crisis.

7) Stop corporate tax dodgers. Punish corporate tax escapees by closing the offshore reincorporation loophole and banning government contracts and subsidies for companies that relocate their headquarters to an offshore tax haven.

8) End conflicts of interest on Wall Street. Enact structural banking and anti-tying reforms that separate commercial and investment banking services and prevent conflicts of interest among financial entities.

9) Expand disclosure. Enact corporate sunshine laws that force corporations to provide better information about their records on the environment, human rights, worker safety, and taxes, as well as their criminal and civil litigation records.

10) Track the extent and cost of corporate crime. Establish a public online corporate crime database at the Department of Justice. The FBI should also produce an annual corporate and white-collar crime report as an analogue to its Crime in America report, which focuses principally on street crime.

11) Protect financial consumers. Consumer protection works best when consumers are organized and represented in legislative and regulatory proceedings. For this reason, create a federally-chartered non-profit Financial Consumers Association to which millions of consumers could belong and redress the imbalance of power.

12) Foster a national discussion on corporate power. Establish a Congressional Commission on Corporate Power to explore various legal and economic proposals that would rein in unaccountable giant corporations. The Commission would seek ways to improve upon the current corporate chartering system and propose ways to correct the inequitable legal status of corporations such as the judicial doctrine of corporate “personhood.” The Commission would be led by a congressionally-appointed experts on corporate and constitutional law, and would hold citizen hearings in at least ten cities.

updated 10/18/2002