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Eric Ries is building a new stock exchange. But he’s also trying to build a new way for corporations to think about who they ultimately serve.
Public corporations serve their shareholders, but Ries — the founder of a new idea called the Long-Term Stock Exchange — thinks that’s a limited purview for a company in 2019. Customers could be a stakeholder. The environment could be a stakeholder. Contract workers could be a stakeholder. Who’s looking out for them?
“We have to pick discrete mechanisms that actually share power and prosperity with the people who are affected,” Ries told Vox editor-at-large Ezra Klein at the Code Conference in Scottsdale, Arizona, on Monday.
The LTSE is an attempt to balance the interests of company founders with the interests of Wall Street by creating a new stock exchange from scratch. While the exact details might change, the LTSE in the past has floated ideas like giving more voting power to shareholders who pledge to hold the stock long-term, along with untethering executive compensation plans from short-term changes in the stock price.
Ries has been toiling on the idea for the better part of a decade, and the SEC last month approved the LTSE to become America’s 14th stock exchange, joining names like the Nasdaq and the NYSE as the home of our stocks.
One of the changes the LTSE is meant to introduce is to broaden the view of who the company serves. While the exact listing requirements are still to be determined, Ries suggested a few ideas:
- Committing to having employee representation on boards of directors, which is something Elizabeth Warren has floated as well.
- Giving gig-economy workers, like Uber drivers and DoorDash deliverers, equity in a company the same way that most other employees have.
- A board committee “tasked with long-term multi-stakeholder strategy-setting.”
- Or assigning each board member to a particular constituency they are responsible for advocating for.
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