Federal instrument · Rebuilds the architecture · Version 4 in drafting
Responsible Ownership & Corporate Accountability Act
The CPAA makes the runaway costly. The ROCA Act rebuilds the architecture so it cannot resume.
The pay is the most visible loss. The governance structures that produced it are the deeper one. The ROCA Act addresses those structures directly: who serves on boards, how votes are weighted, what the asset managers who vote a large share of America's public corporations owe to the people whose money they vote, and how executive incentives are designed. Together with the CPAA it restores the three things real property requires: stake, voice, and accountability.
The Act is built on the finding at the center of this project. The postwar equilibrium was not held in place by owners in the room — by 1963 most large corporations were already management-controlled. It was held by an architecture: boards that retained and reinvested, pay that tracked the enterprise rather than the share price, owners who voted their own stock, and a workforce whose wage was written into the firm's planning. Each title below rebuilds one piece of that architecture in a form fit for the index-fund era.
Title II — Authority and scope
Listed companies; no change to state corporate law. (Title I is findings.) The Act applies to companies listed on a national securities exchange and amends no state corporate code. Where its authority comes from is explained after the titles.
Title III — Board representation
Employee representative directors
At least one-third of board seats reserved for directors elected by the covered workforce. Voluntary opt-in for firms below the CPAA's structural-remedy line; mandatory above 75:1. The election is administered by an independent body at the company's expense, by secret ballot; the domestic covered workforce — the CPAA's definition, contractors included — is eligible to vote and to stand; the company may not nominate, fund, or campaign for candidates; retaliation is actionable; and the directors elected receive the same information as every other director. They owe the same fiduciary duties as every other board member — the Act says expressly that they are directors of the corporation and not a labor organization — and bring the perspective of the people whose livelihoods are bound to the firm's long-term health and who cannot diversify away its failure.
Title IV — Voting
Tenure-weighted voting. Shares held longer earn more votes: one vote under three years, two at three to five years, three at five years and beyond. The bonus belongs to the beneficial owner and to no one else. Officers, directors, holders of ten percent or more — counted as a group under the Exchange Act's §13(d) rules — and their affiliates vote one share, one vote regardless of tenure. A fund or custodian earns no tenure of its own, so shares that are not passed through vote at one; for shares held through a fund, tenure is the shorter of the saver's holding period in the fund and the fund's holding period in the stock. A saver's tenure survives a change of custodian, a rollover, or an inheritance, since nothing was sold. Custodians keep and transmit beneficial-owner holding periods — the record street-name custody has never kept, and the reason tenure voting has never been workable in America until now — with the cost recovered through the existing proxy-reimbursement fee. No opt-out by charter or bylaw. Rewards patient capital. Reduces the leverage of holders whose horizon is the next vesting date.
Title V — Asset managers
Stewardship duty and pass-through voting. A statutory stewardship duty on BlackRock, Vanguard, State Street, and any manager above a defined share of the market. Beneficial owners may direct their own votes. Where they do not, the uninstructed shares are voted in proportion to the shares that were instructed in the same fund — or, where fewer than ten percent of a fund's shares are instructed, in proportion to all instructed shares in the company — the mirror rule the Investment Company Act already applies between funds, and never at the manager's discretion. Selecting the manager's own house policy from a menu is not an instruction. Each fund reports annually what share of its holdings was instructed. The default is in the statute, not left to rulemaking. Custodians and plan administrators must transmit instructions, and a conforming amendment to ERISA deems a plan fiduciary to have met its duty when it follows the owner's instruction or the statutory default. A GAO study of systemic concentration risk.
Title VI — Compensation
Long-term alignment. Half of executive compensation deferred five years or more. Performance metrics must include workforce development and productive investment, not share price alone. The CPAA's definitions of compensation and covered workforce apply, and a firm's position on the CPAA ladder sets the floor for this title's obligations.
Title VII — Buybacks
Board certification required. Major repurchases require a board resolution certifying no impairment of the firm's long-term resilience, with pension funding, wage trends, and investment levels as conditioning factors. Safe harbor for firms meeting the stewardship standards.
Title VIII — Sunset
A learning loop built in. Fifteen-year sunsets on Titles III, IV, VI, and VII, with mandatory SEC evaluation every five years. No sunset on the asset-manager title: the concentration problem warrants permanent structural attention.
"The ROCA Act changes the rules of the governance game so that long-term stewardship becomes the dominant strategy — not because executives are forced to behave differently, but because the payoff structure rewards it."
What the evidence says, and what the Act concedes
The best evidence on employee board representation comes from Germany, where a 1994 reform ended mandatory codetermination for newly incorporated firms. Firms that kept worker directors invested more and used more capital-intensive methods; their wages were roughly the same as firms without. The honest reading is that worker directors are not a wage engine on their own, and are not the catastrophe their opponents predict either. They change what the board sees and what it certifies. That is why Title III is paired with Titles IV through VII rather than offered alone, and why the Act carries a mandatory review throughout and a sunset on every title but one.
How this gets gamed, and what stops it
The test for every title is the same: what would a management team do, with the best lawyers in the country, to keep control while complying? Four answers, and what the Act does about each.
Capture 01
Tenure as entrenchment
Insiders have held their shares for years; everyone else bought within the last three. At three votes a share, a 20 percent insider block casts 43 percent of the votes. France made double voting the default in 2014; widely held companies voted their way back out, and the ones left with it were those where a founding family had chosen it at listing or the state held a blocking stake.
The fix
Officers, directors, ten-percent holders, and their affiliates get no tenure bonus: one share, one vote. There is no opt-out, so the bonus cannot be kept where it entrenches and dropped where it does not.
Capture 02
Tenure for the index funds
In France the long-tenured registered holders were families and the state; in America they are BlackRock, Vanguard, and State Street, which hold every large company for decades. Measure tenure at the fund for shares that are not passed through, as an earlier draft did, and the three managers the Act exists to constrain cast three votes per share on every uninstructed 401(k) share in the country.
The fix
A fund or custodian earns no tenure. The bonus attaches to the saver's own holding period and travels with the saver across custodians; shares that are not passed through vote at one.
Capture 03
Voting by default
Most retirement savers never return a voting instruction. If the uninstructed shares go back to the manager, pass-through changes little. If they are simply not voted, control goes to whoever shows up — and insiders always show up.
The fix
Uninstructed shares are voted in proportion to the instructed shares in the same fund. The manager's discretion is zero, no one is disenfranchised, and the rule is in the statute rather than waiting on the SEC. Custodians must transmit instructions; ERISA is amended so plan fiduciaries can comply.
Capture 04
The captured election
Management writes the candidate list, runs the ballot, and reclassifies the workers it would rather not have voting as contractors. One-third of the board is "employee-elected," and nothing changes.
The fix
Independent administration, secret ballot, the CPAA's covered-workforce definition as the electorate, no company nomination or funding or campaigning, anti-retaliation, and the same information every other director receives. An employee director who cannot read the board book is a symbol, not a director.
Where the authority comes from
A conservative legislator's counsel will ask first by what authority Congress reaches the board of a Delaware corporation. The answer is the one Congress has used before. Titles III, IV, VI, and VII bind the company the way Sarbanes-Oxley bound it for audit committees and Dodd-Frank for compensation committees: by statute, as conditions of listing on a national exchange. The distinction matters — the D.C. Circuit struck the SEC's own attempt at a voting-rights listing standard in 1990 for want of statutory authority, and this Act supplies it. Title V binds advisers, funds, custodians, and plan fiduciaries directly, under the Advisers Act, the Investment Company Act, and ERISA, since a listing condition cannot reach them. The Act amends no state corporate code. Every definition and default is in its text; the SEC administers it and does not write it.
The fifth pillar
The American System — Hamilton's and Clay's program of tariffs, national credit, and internal improvements, revived today in four modern pillars: build it here, protect the wage, secure the hemisphere, secure the dollar — has a fifth pillar not yet in law: keeping the gains of production in the household that produces them. The ROCA Act is its structural core, the architecture inside the firm that decides whether a rebuilt factory's surplus reaches the people who work in it. The other four pillars are followed at
newamericansystem.org.
The draft text
Version 3 of the Act is a discussion draft and is available on request. Version 4, which carries the October 2026 revisions on this page — the insider and fund exclusions from tenure weighting, the mirror rule for uninstructed shares, the election rules, and the listing-standards authority — is in drafting and will be posted here when complete. Version 2 circulated in 2025 as a bill and report. Comments from corporate lawyers, pension trustees, and compensation professionals are especially welcome.
Request the Version 3 draft
Comment on the draft