Last week, U.S. Sen. Marco Rubio, R-Fla., introduced a proposal which, he insisted, “would enable shareholders to hold woke corporations accountable”
Rubio brought out the “Mind Your Own Business Act” last week which he showcased in a piece for Fox Business.
“Specifically, the legislation would require corporate directors to prove their “woke” corporate actions were in their shareholders’ best interest in order to avoid liability for breach of fiduciary duty in shareholder litigation over corporate actions relating to certain social policies. It would also incentivize corporate management to stop abusing their positions to advance left-wing social policies by increasing their personal liability to shareholders for breaches of fiduciary duty resulting from those policies,” Rubio’s office noted.
“Patriotic Americans who love their country and the opportunity it provides should be able to fight back against the growing tyranny of the woke elites running corporate America,” Rubio said. “These are often nationless corporations that amass fortunes divorced from the fate of our great country while pushing socially destructive, far left policies like boycotts and cancel crusades at home. My Mind Your Own Business Act would put the burden of proof on corporations to show that their far left actions were in shareholders’ best interests, and make corporate directors and officers personally liable if they can’t prove it.”
“No more legal tricks that shield these corporate executives from accountability,” Rubio continued. “If they really believe that being woke is good for business, they should have to say so—and prove it—under oath in court.”
The bill would have “large public companies listing on national stock exchanges…provide shareholders with significant holdings with certain privileges with respect to claims for breach of fiduciary duty under covered circumstances” and would ensure “that for claims of breach of fiduciary duty against management brought by shareholders under these covered circumstances, management would have the burden of proof and, if found in breach of their duties, be liable without indemnification by the company for a minimum amount of damages and attorney’s fees.”
Rubio’s proposal would cover “circumstances include if a company takes an action on a primarily non-pecuniary basis in response to state law, boycotts a class of persons or industry on a primarily non-pecuniary basis, or uses primarily non-pecuniary public reasoning for an action” and, under it, “corporate defendants would be bound by presumptions that pecuniary interest does not include common defenses used to defend exercises of business judgment, including the media image of the company or employee morale.”
The bill was sent to the U.S. Senate Banking, Housing, and Urban Affairs Committee on Thursday. So far, there are no co-sponsors in the Senate and no companion measure in the U.S. House.