Senator Elizabeth Warren’s “Accountable Capitalism Act” claims to be the bill that will protect citizens from corporate greed and ensure that everyone benefits from the booming economy. However, in reality, this act not only fails at both of these tasks but also puts unnecessary regulations on corporations.

The Accountable Capitalism Act contains four major parts: corporations making more than $1 billion must obtain a charter directing them to respect the wellbeing of their community and workers; all corporations must ensure at least 40% of their board members are employees of the company; corporate executives cannot sell their company stock for at least five years after obtaining it; and 75% of all boards must approve any political spending.

First, the requirement for a corporate charter is ambiguous, since it does not contain any concrete rules to govern corporate behavior. Senator Warren asserts in her Wall Street Journal op-ed that corporate charters will encourage businesses to focus more on benefiting workers than just their shareholders. She may be right about the underlying problem, since companies do focus overwhelmingly on shareholder profits as opposed to employee paychecks. A study by William Lazonick of the University of Massachusetts finds that in the past decade, companies have paid an average of $412 billion dollars more to stock owners than stock owners have paid them through investments, meaning businesses have less money to direct toward the increase in their workers’ wages.

However, corporate charters will not stop companies from emphasizing investor payouts. The bill does not list any definitions of good corporate behavior, nor does it give any punishments for bad behavior, such as failing to raise workers’ pay. There are other, more effective methods to grow workers wages, such as raising the minimum wage and strengthening workers’ bargaining power, according to a study by the Economic Policy Institute.

Second, while putting workers on boards of directors (also called co-determination) does have some benefits, it would also drastically change the stock market as we know it. In Germany, a country where co-determination is widespread, stock value relative to company value is about half that of US companies. Studies also show that co-determination can reduce the value of a company’s stock by roughly 20 percent, according to some studies done in Germany. This data shows that implementing this proposal across all companies could massively reduce the total value of the US stock market, and the effects of this change are unpredictable.

Third, executive pay has skyrocketed in recent years but not in the way Senator Warren thinks. The Accountable Capitalism Act prevents executives from selling stock for five years after receiving it. However, one of the major factors driving this pay increase is not compensation in the form of stock, but rather stock options, which guarantee that executives can buy stocks at a certain price. If the stock rises above that price, they can sell the stock for a profit. If the stock loses value, it doesn’t hurt an executive’s salary because they can simply choose not to use the option. This is problematic because they encourage executives to take unnecessary risks, like buying other companies or expanding into new markets, with few consequences for their actions. Focusing on these options instead of normal stock would be a better way to shrink the pay gap and limit reckless behavior.

Fourth, restricting how corporations can make political contributions is an irrelevant regulation that fails to address the real, root problems with campaign finance. Laws that increase donation transparency, for example, are more sensible solutions that do not put more rules on how private companies govern themselves.

Senator Warren is correct that there are problems with modern capitalism, but she is incorrect in her approach to rectify them. They are certainly not solutions like those proposed in the Accountable Capitalism Act, which definitely do not fix American corporations, and may actually harm them.