The Case for Corporate Democracy: Shareholders, Institutions, Activists, and the Question of Corporate Control

The 1970 Annual Shareholders Meeting at General Motors represented a turning point for shareholder activism in the United States. The attending shareholders sought to use their rights as shareholders to expand corporate democracy to allow for greater control of corporations and their policies. Attendees included independent shareholders who had long sought to reform corporate governance now joined by a newer generation of activists who endeavored to use the tactics of those previous activists to broaden the causes corporations could be pushed on, including Civil and women’s rights, environmentalism, and anti-war policies. This meeting represented a new opportunity for advancing corporate democracy through the alliance of independent shareholders with new social activists pushing for similar ends using shared tactics. Both sought to use the resolution process and selection of directors to reshape corporations around causes and policies beyond what corporate management dictated for them. The alliance between these disparate shareholders created an opportunity for growth in shareholder activism while providing a new vision of corporate democracy that offered greater shareholder control and oversight over management. The GM annual meeting’s significance stems from this tentative alliance formed here and how it shaped future meetings through the composition of activists in their efforts to promote democratic corporate governance while expanding the scope of what shareholders could push their corporations to do. This new coalition of shareholders benefited from increased demands on corporations to respond to growing concerns and social crises resulting from the war in Vietnam, civil unrest, and economic volatility during the transition between the decades. This annual meeting initiated a shift in shareholder activism that persisted the rest of the decade presenting an opportunity for an expansive economic democracy to include causes in addition to profit.