Conflicts Over Corporate Control: The Role of Labor and Employment Relations

Source: Stephen R. Sleigh, Perspectives on Work, Summer 2006, Volume 10, no. 1

The theme of LERA’s Annual Meeting in 2006 was “Labor and Capital in the Twenty-First Century: Human, Social, and Financial Contributions to Creating Wealth.” In a wide variety of settings— including formal sessions and informal discussions in the hallways—lively debate was the order of the day….

… Despite the positive role large unionized companies play in American society, a fundamental conflict exists between the short-term financial focus of many in the investment and management communities and the longer-term focus of others, including employees who value job security and long-term investors who seek consistent growth. Conflicts over corporate control revolve around this tension. From a strategic union perspective, developing an action plan around making large companies more accountable to employees and other stakeholders, including long-term shareholders, must involve a number of new approaches.

Given the track record of labor’s success in trying new approaches, we have our work cut out for us. Still, unions represent employees in nearly 80 percent of the largest publicly traded companies in the United States. Perhaps more significant is the fact that nearly half the assets in American equity markets are held by the pension funds and savings plans of organized workers and union-represented employers. Taken together, unions have the potential to exert considerable leverage on capital markets.

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