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.
Two SEC commissioners: Is the Reg S-K modernization proposal too principles-based? And why no climate change disclosure?
Yesterday, Commissioners Robert Jackson and Allison Lee published a joint statement to encourage public comment about two aspects of the proposal to modernize Reg S-K (see this PubCo post), released on August 8, about which they had some, uh, reservations. They both indicated their support for release of the proposal, particularly its focus on adding “human capital” as a disclosure topic, but—and it’s a significant “but”— they took issue with the proposal’s “shift toward a principles-based approach to disclosure and the absence of the topic of climate risk.”