Elizabeth Warren, the Massachusetts senator tipped as a Democratic presidential candidate in 2020, has unveiled new plans for legislation aimed at reining in big corporations, redistributing wealth, and giving workers and local communities a bigger say.

Warren will introduce the bill dubbed the Accountable Capitalism Act on Wednesday. The proposal aims to alter a model she says has caused corporations to chase profits for shareholders to the detriment of workers.

Under the legislation, corporations with more than $1bn in annual revenue would be required to obtain a corporate charter from the federal government – and the document would mandate that companies not just consider the financial interests of shareholders.

Instead, businesses would have to consider all major corporate stakeholders – which could include workers, customers, and the cities and towns where those corporations operate.

Over the last year, corporate profits have soared while average wages for Americans haven’t budged. It’s been the same sad story for decades. Today I’m introducing a new bill to help return to the time when American companies & workers did well together: https://t.co/9isNoIyzoW — Elizabeth Warren (@SenWarren) August 15, 2018

Anyone who owns shares in the company could sue if they believed corporate directors were not meeting their obligations.

Employees at large corporations would be able to elect at least 40% of the board of directors. An estimated 3,500 public US companies and hundreds of other private companies would be covered by the mandates.

In an article announcing the bill, Warren said she was looking to reverse “a fundamental change in business practices” dating back three decades that made corporations beholden to the bottom line at the expense of better worker wages and local investment.

“The obsession with maximizing shareholder returns effectively means America’s biggest companies have dedicated themselves to making the rich even richer,” she wrote in the Wall Street Journal.

The proposal would create a new Office of United States Corporations within the Department of Commerce, which would be responsible for granting the charters – and which could revoke a charter if a state attorney general requests it, and the office finds the firm has a history of egregious and repeated illegal conduct and has failed take action to correct it.

Large companies dedicated 93% of their earnings to shareholders between 2007 and 2016 – a shift from the early 1980s, when they sent less than half their revenue to shareholders and spent the rest on employees and other priorities, Warren said.

“Real wages have stagnated even as productivity has continued to rise. Workers aren’t getting what they’ve earned. Companies also are setting themselves up to fail,” she wrote.

Corporations currently get their charters at the state level.

The legislation would also require 75% of directors and shareholders to approve before a corporation could make political expenditures.

Some criticised the idea, calling it excessive government control.

“The last thing I want is Elizabeth Warren telling companies what they can or cannot do,” Kevin Kelly, the CEO of Benchmark Investments, said on Fox Business. “The private market will reward those that take care of their stakeholders.”

Steve Forbes, the chairman of Forbes Media and failed presidential candidate, said on the same show that the proposal would lead to “stagnation”.

He said: “What she’s talking about is freezing the economy as it is, keeping things as they are. That’s just not going to work.”

But a group of academics studying the economics and history of corporations endorsed the approach in a letter to Warren.

“We believe legislation along these lines to be long overdue,” wrote the group, led by the Cornell University law professor Robert Hockett. “While some of us would like to go even further than the Act does, we all agree that your legislation takes the critical first steps in realigning our regime of incorporation with its original purposes.”