Should Companies Have to Disclose Political Donations to Their Shareholders?

• Should corporations disclose their political contributions to shareholders? That’s the question at the center of the Corporate Political Disclosure Act of 2018, which would direct the Securities and Exchange Commission (SEC) to issue regulations to require public corporations to disclose political expenditures.
• Regulators aren’t the only ones pursuing this issue. So are investors, and they seem to be gaining support. You might be able to have a say, too.
• Activist investors increasingly use the proxy voting process to push for corporate environmental, social, and governance improvements, including disclosure on political influence and spending.

Proxy what?

• If you own shares in a company—whether directly or through a managed fund like a 401k or IRA—you have the right to vote on certain corporate matters. Since most people can’t attend companies’ annual meetings, corporations offer shareholders the option to cast a proxy vote by mail.
• Companies are more willing to discuss their election spending than lobbying, yet expenditures on lobbying dwarf what goes to elections (paywall).
• Only 12 percent of S&P 500 companies report how much they spend on lobbying, and most only at the federal level. Almost none disclose state-level spending.
• According to a recent report:

Companies are revealing more about how much they spend in elections and lobbying but remain reticent about disclosing how much they give to intermediary groups that use corporate money to pursue political objectives—trade associations, non-profit “social welfare” organizations or charities that have clear partisan goals.

What do you think?

Should companies disclose their political contributions and lobbying expenditures to shareholders? If you own shares in the following companies, you still have time to vote your proxy on this topic:

• Alphabet
• CarMax
• Chevron
• Cisco Systems
• Comcast
• Exxon Mobil

Hit Take Action to let your representatives know what you think, then share your thoughts below.

Image Credit: Damian Gadal

--Sara E. Murphy