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February 28, 2014
More than 120 Companies Adopt Political Disclosure
    by Robert Kropp

The Center for Political Accountability announces that 122 companies have adopted political transparency and accountability as a result of agreements with the organization and its investor partners.

Ever since the Supreme Court's controversial Citizens United decision in 2010, resolutions addressing corporate political spending have been the most common type filed by shareowners. And 2014 does not appear to have shaped up any differently: a coalition of sixty investors announced recently that they have filed 48 resolutions with companies, requesting that they “annually report their federal and state lobbying. That includes any payments to trade associations used for lobbying as well as support for tax-exempt organizations that write and endorse model legislation.”

And although the Securities and Exchange Commission (SEC) has reportedly removed political spending from its 2014 agenda, Chair Mary Jo White did state in February that Commission “staff will focus on making specific recommendations for updating the rules that govern public company disclosure” this year.

While frustration with the lack of regulatory action on the issue is understandable, investors—and to an extent corporations as well—have redoubled their efforts to develop transparency and board accountability for corporate political spending activities. Led by the Center for Political Accountability (CPA), shareowner engagement has thus far led to 122 companies adopting policies governing political disclosure.

Following robust shareowner support for resolutions on political spending, CF Industries, Peabody Energy, and EQT Corp. have joined the “number of publicly held US companies adopting political transparency and accountability as a result of agreements with CPA and its investor partners,” CPA stated. During the 2013 proxy season, two-thirds of CF Industries' shareowners supported a resolution filed by the New York State Comptroller's office calling for disclosure.

“The company's disclosure gives shareholders important insight into where corporate dollars are directed for political purposes,” New York State Comptroller Thomas DiNapoli said.

In the first 2014 vote on disclosure, 47% of shareowners supported a resolution calling on Emerson Electric to adopt a political spending policy. In addition to filing the resolution with Emerson, Trillium Asset Management has filed resolutions addressing political spending and lobbying expenditures with five companies whose annual general meetings are yet to occur.

“Secret political spending continues to pose risks for corporations and their shareholders,” CPA President Bruce Freed wrote in a recent Founder's Column. “Yet mainstream support for corporate political disclosure keeps building.”


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