The CPA-Zicklin Index of Corporate Political Disclosure and Accountability ranks companies in the S&P 100 according to their disclosure and board oversight of political spending activities. In the aftermath of the Supreme Court’s Citizens United decision, and with the 2012 electoral season already underway, the Index provides shareowners and other stakeholders with insight into how the nation’s largest companies are addressing the risks associated with political spending.
Working with Peter Kinder, a co-founder of KLD Research & Analytics and Professor William Laufer of Zicklin, CPA identified seven key indicators:
- Disclosure of contributions or expenditures to candidates and committees;
- Disclosure of independent expenditures;
- Disclosure of payments to trade associations and other tax-exempt groups used for political purposes;
- Disclosure of payments to ballot measure committees;
- Archived reports on website of direct spending;
- Policy of regular board oversight; and
- Semiannual posting of political spending report.
The advisory committee for the Index included Steve Lydenberg of Domini Social Investments and Julie Gorte of Pax World Management. Congratulations to Bruce Freed, president of the Center for Political Accountability, for his tireless work in this important area.
As Freed said, “Fifty-seven companies either disclose, have board oversight, or don’t engage in political spending. Forty-two are doing some form of trade association disclosure. A third have adopted some form of restrictions on their political spending.”
Furthermore, the Index reports, 24 companies state that they do not make independent political donations, and 16 say they do not spend funds directly on candidates or political committees. Colgate-Palmolive and IBM prohibit use of corporate funds for either direct or indirect political activity.
Four companies earned the highest score of 100 in the Index: Colgate-Palmolive, Exelon, IBM, and Merck. At the other end of the spectrum, eight companies—including Amazon.com, Berkshire Hathaway, Cisco Systems, Nike, Sprint Nextel, and Walt Disney—received scores of zero.
Index Ranks Companies on Political Spending Disclosure by Robert Kropp, Sustainability Investment News, 10/28/2011.
Take Action: As a shareowner in Amazon.com (contact firstname.lastname@example.org), Berkshire Hathaway (contact email@example.com) and Cisco Systems (contact via online form, click investor information), I couldn’t stand idly by. Please join in raising the issue with companies in your portfolio. I sent the following simple e-mail:
As long-term shareowners of XYZ company, my wife and I are concerned that our company placed dead last on the CPA-Zicklin Index of Corporate Political Disclosure and Accountability. We ask that our Board improve disclosures in this area. Better yet, take the route of Colgate-Palmolive and IBM, which prohibit use of corporate funds for either direct or indirect political activity.
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