By David Burling
Several advocacy groups are seeking to persuade companies of all sizes to limit their political contributions and disclose their political expenditures. Of these, some are urging these companies to adopt shareholder resolutions supporting these positions. There is even a rating system for governance of major corporations that includes, as one factor, how they handle political contributions. For example, The Center for Political Accountability publishes an annual report called the CPA-Zicklin Index, which includes that information. It is part of a coalition that since 2003 has pushed for each company to develop and disclose guidelines on political contributions directly and through trade associations and other tax-exempt organizations used for political purposes. Part of the requested disclosure includes the identities of the corporate officers making the decisions and the amounts donated. Other organizations involved in this arena include The Public Interest Research Group, Public Citizen, and, more recently, American Promise, one of the organizations RUNM works closely with.
American Promise has organized a group to create a well-defined set of resolutions for corporations to adopt, including such fundamental goals as improving the wellbeing of the community, the workers and shareholders over the long term and no longer making profitability the sole purpose of the corporation’s existence. American Promise calls this its Corporate Statement Project.
American Promise also promotes an initiative to get business professionals to sign an Individual Statement of Principles in support of these broader and more inclusive corporate goals. These principles would include commitments to full disclosure of political contributions and expenditures. They would also commit the companies to support a well-functioning and representative government.
Similarly, the Shareholder Commons is another organization involved with American Promise on this project and working on its own set of “guardrails” for corporations to adopt, which includes support for a constitutional amendment to overturn the landmark U.S. Supreme Court Citizens United decision, which opened the door to “dark money” donations – that is, donations from certain political action committees that do not have to be disclosed.
These efforts will probably prove challenging, and many of them will probably be directed at large shareholder groups such as pension funds and mutual fund companies. Unfortunately, as the New York Times recently disclosed (https://www.nytimes.com/2020/07/21/business/dealbook/corporate-political-donations.html), some companies often profess values that are then undercut by contributions to parties and candidates who don’t support those values.
The next step is to develop and implement guidelines acceptable to corporations that will create a more socially beneficial outcome while helping their corporate bottom line.
David Burling is a retired lawyer and a member of RepresentUs New Mexico. He lives in Lamy, New Mexico.