Thomas J. Donohue Thomas J. Donohue
Advisor and Former Chief Executive Officer, U.S. Chamber of Commerce


May 07, 2018


It seems like a common occurrence—a company goes public, makes a big splash in the news, and raises billions of dollars through its IPO. But the truth is that this used to happen far more often than it does today. Over the past 20 years, the number of public companies traded on the stock market has been cut in half.

This trend hurts the entire economy. When a company goes public, it receives an infusion of capital that helps propel it to the next level of growth, which means lots of new jobs. In fact, 92% of a public company’s job growth occurs after it completes its IPO. Going public also provides more opportunities for Main Street investors and American families to share in the success of companies of all sizes and sectors.

With these benefits, why are more and more businesses deciding to stay private? Because they see the network of laws, regulations, legal hazards, and public relations pitfalls that await public companies and conclude that it’s simply not worth it.

In recent years, our broken and outdated financial regulatory system has shackled public companies with rules that restrict growth and limit options. Public companies have also been the target of short-term shareholder activists that coerce and even extort them into pursuing policies that advance special interests, rather than the interests of their employees and shareholders. Further, some plaintiffs’ lawyers hold the threat of ridiculous class action lawsuits over the heads of companies in order to get rich.

The U.S. Chamber of Commerce is working to reverse these trends. We’re urging the Senate to pass the Corporate Governance and Transparency Act, which has already passed the House twice. It would empower the SEC to oversee today’s increasingly rogue proxy advisory firms. We’re also calling for passage of a new JOBS Act to bring our system of 1930s-style securities regulation into the 21st century, and the Securities Fraud Act of 2018 in order to stop the Martin Act from leveling accusations of fraud that can neither be proven nor disproven. Finally, the U.S. Chamber Institute for Legal Reform is leading the fight for commonsense reforms to class action lawsuits.

It’s time to stand tall and punch back against the onslaught of abuse aimed at public companies. If we succeed in enacting these measures, we’ll likely see a resurgence in IPOs that will create millions of new jobs, plentiful opportunities for American families to buy shares of their favorite companies, and a stronger, more vibrant, and more innovative economy.

About the authors

Thomas J. Donohue

Thomas J. Donohue

Thomas J. Donohue is advisor and former chief executive officer of the U.S. Chamber of Commerce.

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