In July, Representative Carolyn Maloney contacted SEC Commissioner Robert Jackson to solicit his views on legislation that would require public companies to disclose their corporate political spending. Jackson has now responded. In his view, the absence of transparency about political spending has led to a lack of accountability, allowing executives to “spend shareholder money on politics in a way that serves the interests of insiders, not investors.” But because investors typically put their money into mutual funds and other similar investment vehicles, their voting rights are typically exercised, not by the investors themselves, but instead by these institutions on their behalf—and most often not in sync with the surveyed preferences of investors: “while ordinary investors overwhelmingly favor transparency in this area, the biggest institutions consistently vote their shares to keep political spending in the dark.” And, he charges, it’s not just corporations that are opaque about their own political spending—institutional investors are likewise opaque about their votes against shareholder proposals for spending disclosure.
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for disclosure proposals submitted by CPA (and its “shareholder partners”) and the number of shareholder proposals withdrawn as a result of agreements reached with companies for disclosure of political spending and board oversight.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?
Notwithstanding the deregulatory emphasis of the current administration, two campaigns are currently being waged to convince the SEC to adopt new regulations mandating more disclosure—one related to human capital management and the other related to a frequent target, corporate political spending. Are these just pipe dreams? Is it time for a reality check? Or might there be some basis for believing that this SEC might act on these requests?
by Cydney Posner On Friday, the House passed H.R. 5485, the Financial Services and General Government Appropriations Act for fiscal year 2017, which includes appropriations for the SEC. As noted here and here, included as part of the bill were several amendments directed at defunding SEC rules, potential rules and […]
by Cydney Posner In a speech last week to the International Corporate Governance Network Annual Conference, SEC Chair Mary Jo White announced that the Corp Fin staff is preparing a proposal to amend the current rule requiring board diversity disclosure in proxy statements. The goal will be to require “more […]
Politico reports: prohibition on corporate political spending disclosure a sticking point in omnibus spending bill negotiations
by Cydney Posner According to Politico (subscription required), a “provision to prohibit the SEC from requiring companies to disclose their political campaign contributions is one of the last sticking points in the omnibus spending package, two sources said.” One of bill’s negotiators said there were a few sticking points remaining, one […]