Has all of the current political unrest and social upheaval had any impact on the drive for political spending disclosure? Apparently so, according to the nonpartisan Center for Political Accountability, which reports in its June newsletter that support for shareholder proposals in favor of political spending disclosure hit record highs this past proxy season. But one risk potentially arising out of political spending is reputational, which could fracture a company’s relationship with its employees, customers and shareholders. As companies and CEOs increasingly offer welcome statements on important social issues such as climate change, healthcare crises and racial injustice, the current heated political climate has heightened sensitivity to any dissonance or conflict between those public statements and the company’s political contributions. When a conflict between action in the form of political spending and publicly announced core values is brought to light, will companies be perceived to be merely virtue-signaling or even hypocritical? To borrow a phrase from asset manager BlackRock, if the public perceives that these companies are not actually doing “the right thing”—even as they may be saying the right thing—will they lose their “social license” to operate? (See this PubCo post.) CPA’s brand new report on Conflicted Consequences explores just such risks.
In this article from the Center for Political Accountability, the authors tout the recent “banner proxy season” for disclosure of political spending, both in terms of the uptick in shareholder support for disclosure proposals submitted by CPA (and its “shareholder partners”) and the number of shareholder proposals withdrawn as a result of agreements reached with companies for disclosure of political spending and board oversight. According to the authors, these results reinforce “earlier findings about ‘private ordering’ making political disclosure and accountability the new norm for companies.” Is there a new “eagerness by companies to adopt or strengthen political disclosure and accountability policies”? Is it now viewed as a key element of good governance? What is the impact of today’s highly politicized environment?
Prohibition on political spending disclosure requirement survives in omnibus spending bill, WSJ reports
by Cydney Posner The WSJ is reporting that the provision prohibiting the SEC from adopting requirements for political spending disclosure has survived as part of the omnibus spending bill (12/15 text ). (See this PubCo post.) Not that the SEC was addressing the issue anyway. More specifically, Section 707 of the bill […]
House aims to stop SEC from requiring political spending disclosure — companies increasingly “volunteer” spending information
by Cydney Posner It may seem early to you to be thinking about Christmas, but not to Congress. In fact, it’s just that time of year again when Congress uses annual appropriations bills as a Christmas tree for all of its favorite ornaments. In this year’s financial services spending bill, […]