Preface

WE ARE NOT UNTETHERED IDEALISTS. With a combined experience of more than sixty years in corporate governance as lawyers and scholars, we understand that business corporations provide enormous value in many forms, including salaries, employee benefits, health care, useful innovations, tax revenues, and philanthropic donations. Yet at the same time, we know that corporate behavior can have negative repercussions, such as environmental pollution, unfair labor practices, and gender pay gaps, to name a few.

These results are inextricably linked to the underlying nature of today’s corporate governance system, which has been dominated by a myopic focus on short-term financial results at the expense of long-term performance. This in turn results in a vicious cycle, which includes reducing expenditures on research and development; decisions that harm employees, customers, and communities; and actions that on the face of it seem reckless and socially irresponsible. In short, given the historical norm of shareholder value and the nature in which shares are often voted, the corporate sector’s potential for addressing broader economic, social, and political problems has not been optimized.

A few years ago we began to specifically focus on a precise question: Is there a way to address the flaws in our corporate governance system in a manner that helps address a number of these economic, social, and environmental threats? It is this question that gave rise to this book, and we believe the answer is “yes.”

This book offers a simple plan for harnessing the power of corporations to save ourselves and our future. It is a plan that is structured around free enterprise, it requires no government funding, it involves no forced redistribution of wealth, and it is completely voluntary and will not force anyone to do anything they object to. Unlike many other proposals, our plan does not sacrifice one value to support another. We call our project Citizen Capitalism.

At the heart of it lies the creation of a Universal Fund, which is based on a mutual fund model, but with several key exceptions, all of which are designed to broaden access and opportunity for everyday citizens to participate in capital markets. In addition, our Universal Fund model is designed to shift critical leverage points in our economic system and unlock the enormous potential of corporations to be a positive force for good.

We have written this book for anyone interested in having a role in building a better future. In it, we offer up to you and to the world a practical blueprint for the creation of the Universal Fund. We describe a very direct way to participate in making the Universal Fund a reality at the end of this book, and at CitCap.org you can receive information on events and join discussions.¹

As you read through this book and learn more about this transformative plan, and as you come to share our appreciation of its deeply positive potential impact, we invite you to take stock of your skills, your talents, your experience—and then ask yourself what you can do to participate in Citizen Capitalism.