Archive | October, 2017

Conoco Virtual Only Meetings Targeted

Conoco’s virtual only annual meeting is the target of a shareholder proposal by the Sisters of St. Francis of Philadelphia. A similar proposal was filed at Comcast. The Conoco resolution has already been cofiled by the Church of the Brethren Benefit Trust and the Needmor Fund, a Walden client.

As responsible shareholders, we believe good corporate governance includes the opportunity for shareholders to meet face-to-face with the company’s Board and management at the Annual Shareholders Meeting.

Tim Smith of Walden Asset Management stated

The decision to move an annual meeting to cyberspace has moved far beyond a minor internal management decision and become an important governance matter for companies. Imagine if companies facing major controversies had decided to forgo physical meetings. If a company faces debate on their comp package or its climate change position or has votes on shareholder resolutions it is also a problem to have a disembodied discussion on line for a  stockholder meeting.

For more views, see Nuns tell companies to get real over virtual AGMs @FT.  Continue Reading →

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Disney Ties to Pat Robertson Need Clarified

Disney ties to Pat Robertson could lead to further gun violence if not clarified. Nancy Levine wrote a post that demands attention from Disney shareholders. Where Is Disney’s Outrage About Pat Robertson?

Pat Robertson’s Outlandish Blame Game

As Levine notes, Pat Robertson blamed the Los Vegas massacre on Americans’ disrespect for Donald Trump. Among the things Robertson said,

  • There is profound disrespect of our president all across this nation. They say terrible things about him…
  • There’s disrespect now for our national anthem, disrespect for our veterans, disrespect for the institutions of our government, disrespect for the court system, all the way up and down the line, disrespect…
  • When there is no vision of God, the people run amok.

Disney Ties to Pat Robertson

As Levine notes,

Robertson made his comments on his TV show The 700 Club, which airs twice a day on ABC’s Freeform Network. The network, formerly known as ABC Family, is part of Disney Television Group/ABC and wholly owned by the Walt Disney Company.

Disney CEO Robert Iger has also been vocal after the Las Vegas shooting. Three Disney employees were killed in the massacre. Iger, speaking out about gun violence at the Vanity Fair New Establishment Summit, said, “In this day and age we get outraged when an athlete doesn’t stand for the national anthem. Where is the outrage here?”

While Iger statement is positive, as Levine points out, are Disney and Iger outraged by Robertson’s comments? They should be.”

Disney is handcuffed to Robertson and his Christian Broadcast Network, which produces The 700 Club; bound by contractual agreement. According to TV Insider: “When Disney/ABC bought Fox Family Channel for $5.3 billion in 2001, it too was saddled with that agreement. The deal says The 700 Club can’t be buried in the middle of the night, but must air during certain dayparts.”

But Disney’s agreement to broadcast Robertson’s show does not exempt the company from its moral responsibility to renounce his remarks. Disney ties to Robertson could prove to be a liability due to adverse publicity. Several corporate governance experts are cited on Disney’s duty and/or moral obligations.

Disney Ties to Pat Robertson2

Disney Ties to Pat Robertson: Shareholders Should Act

Disney has no obligation to apologize to victims and their families for what Pat Robertson said. Continued airing of Robertson’s show appears to be the result of contractual obligations entered into years ago that are too expensive for Disney to buy out, especially given that it is probably a profitable relationship. Even a crackpot can gather a relatively large audience in our world of fragmented communications.

However, Disney would do well to make a clear statement that Pat Robertson’s views do not represent those of Disney, even though he appears on one of their networks. Going further, Iger could make a statement that leaves no doubt about where Disney stands on the issues and could even renounce Robertson’s remarks, explaining their contractual relationship. Disney certainly has a stake in the growing escalation of gun violence, since their theme parks stand to lose if they become targets.

Making it easier to buy silencers is now stalled in Congress, hidden in the “Sportsmen’s Heritage and Recreational Enhancement Act.”  A bill to ban gun bump stocks has still not passed.  Disney and its board should be careful not to just weigh potential profits and losses. Disney is seen by many as the epitome of American values. They should be standing for the American dream, not the American nightmare. Colombine, Newtown, Los Vegas… at some point Disney will need to use whatever moral authority they have to curb this growing epidemic. Any such statements will lose authority if they wait until after an attack on Disney.

Disney as an institution is also an American symbol, not unlike the flag, the NFL or the President. Flags are only material substance. Even imbued with glorious symbolism, they cannot act on their own. However, the symbolic respect shown to people holding office, such as the President, and symbolic organizations like the NFL and Disney has to be earned every day. Disney could burnish its own reputation by clearly denouncing Pat Robertson’s views and backing gun control measures. Disney ties to Pat Robertson should be clarified.

I urge shareholders and customers to send an email to Walt Disney’s Corporate Citizenship Team with an email such as the following:

Pat Robertson, on Disney’s The 700 Club, blamed the Las Vegas massacre on Americans’ disrespect for Donald Trump, our national anthem and our institutions. “When there is no vision of God, the people run amok,” he said. Football players taking to one knee in silent prayer did not lead to the massacre. God did not punish those in attendance for disrespecting President Trump or the flag.

Do not wait until Disney theme parks become the next target. Denounce Robertson’s remarks. Organize businesses against gun violence and lobby Congress to enact stricter gun control laws.

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William Steiner, Shareholder Activist

William Steiner recently became the most experienced shareholder activist alive to win majority votes for shareholder proposals at public companies. A few months ago, he celebrated 40 years of shareholder activism with an overwhelming victory at Haemonetics Corporation (HAE). The following is based on an interview with Mr. Steiner by his son, Kenneth Steiner, who works with his father to carry on what has become a family legacy.

Steiner attended Morris High School in the Bronx in the 1930s, graduating at age 16. He then attended City College in Manhattan where he eventually received his BBA after returning from service in WWII.

William Steiner: Initial Investments

Steiner had a long and successful career as the owner of Accurate Personnel, one of the largest employment agencies in New York City between 1949 and 1982.  After selling his business, William Steiner became a full-time investor and used the proceeds from his business to build a sizable stock portfolio.

Steiner has been actively involved in corporate governance and shareholders rights since the 1970’s. At that time he started attending annual meetings as an interested shareholder of various companies. Before attending the annual meetings he would carefully review the proxy statement and make notes on items of interest to him. This included matters of director independence or conflicts of interest,  excessive executive pay or conflicts of interest between the company and so called outside auditors.

At times, he worked closely with both John and Lewis Gilbert, the famed activists who  started the entire shareholder rights movement many decades before and who were acting alone against the entirety of corporate America.

William Steiner: Insight

He studied value investing and became an expert in fundamental security analysis.  Over time Steiner realized, “Unfortunately, many good companies were being mismanaged, causing their companies to under-perform.” This exposed a deficiency in portfolio management theory. Without a good CEO and an active and engaged board of directors, any company could be run for the benefit of management, not shareholders.  Too many shareholders were disengaged and allowed incompetent management to get away with whatever they wanted, including excessive compensation  or conflicts of interest.

I decided to start attending annual meetings and asking tough questions.  As you could imagine the executives were often not very happy to face criticism!  They were used to a submissive shareholder base.

One of the first meetings he attended was Citibank in the late 1970. Steiner criticized the board and management for excessive compensation, perks and a directors retirement plan. After the meeting former President Gerald Ford (an outside director) approached him. According to Steiner, he “put his arm around me and told me I was correct. Soon thereafter, Ford resigned from the board.

Many companies  had never had an individual shareholder raise tough questions at the annual meeting.  Soon I realized that they actually respected me for speaking out and, indeed, feared having any of these abuses exposed.  The companies started becoming friendlier towards me in order to avoid trouble.

Many asked to take me out for dinner, etc.  However I would never let them buy me more than a cup of coffee because I did not want to owe anybody anything.  While it was valuable to have conversations with the CEO or his representative, I became aware that the real power for an individual shareholder was through the proxy statement.

I saw that a powerful resolution addressing a key issue in the official proxy statement would reach thousands of shareowners and bring unwanted attention to the board of directors (and important reforms could be won. Some companies changed policies in response to the exposure. Eventually, I actually became friends with some of the CEO’s and investor relations personnel. They appreciated my sincere interest as a shareholder activist and saw I was not a so-called ‘gadfly.’

Often companies would offer to make changes if I would agree to withdraw my proposal.  I was always amenable to a reasonable agreement if the company would make some improvements in their corporate governance. I emphasized to the companies that I was not an enemy but actually a friend of corporations and capitalism as a businessman myself.

I told them the only way to sustain support for capitalism in America was for companies to do the right thing for their shareholders, employees and the community. If they were selfish and insular they would kill the goose that laid the golden egg!

William Steiner: USA Volunteer

After several years of acting alone as active investor and shareholder proponent William got a call from Susan McBride in Washington, DC who was working for an organization being founded by famed investor and oil tycoon T. Boone Pickens. A group was being formed to promote shareholder rights nationwide and Steiner had come to their attention.

He was asked to volunteer to help organize and present shareholder proposals; to  educate the public; and, eventually, to influence Congress and public officials. Steiner says,

I was closely involved with both Boone Pickens and Ralph Whitworth in the highly successful United Shareholders Association (USA) in the 1980’s, which sponsored shareholder proposals across the country. It was very rewarding and helped bring these important issues to a much more prominent place than ever  before.

I worked closely with Ralph Whitworth who was the top assistant to Boone in the organization. We accomplished a lot. I  was extremely sad to hear that my friend Ralph Whitworth had unfortunately died of cancer last year after a valiant struggle. He did a lot for shareholders rights and became a very successful hedge fund manager in subsequent years.

William Steiner: Recognized Shareholder Activist

William Steiner has been given credit by governance expert Nell Minow for almost single handedly bringing about the elimination of pension plans for outside directors. Professor Charles Elson, who heads the John L. Weinberg Center for Corporate Governance at the University of Delaware, teaches his efforts as part of the college curriculum. See Shareholder Activist, From Basement to Boardroom.

Steiner also successfully brought proposals to pay directors primarily in stock; ensure the majority of directors are independent; eliminate the staggered board system; and also  ensure outside accountants are not simultaneously consultants on CEO pay at the same company. Other successful resolutions eliminated director entrenchment devices such as poison pills from corporate bylaws.

These accomplishments occurred due to his efforts at hundreds of companies over the past thirty years.  In recent years, he won majority votes on dozens of proposals, ranging from proxy access to eliminating super majority voting standards and many other issues of concern to large and small shareholders alike.

He is very satisfied with the numerous positive changes that have occurred over the past thirty years but believes much work remains. William Steiner is generally a long-term shareholder. He follows the stock market regularly and trades occasionally. He intends to introduce about ten shareholder proposals the upcoming 2007-18 proxy season, vowing to continue his fight for democracy.

I will stay active to fight for our rights as shareholders. I was proud to volunteer for military combat service during World War II in 1942. I served with the famed 11th Airborne Glider Regiment in the Pacific theater and won a Bronze Star for bravery during combat in the Philippines in 1944. I was proud to be part of that effort.  We helped preserve freedom and democracy for America and the world.

William Steiner (right) and Bob Huntley

William Steiner (right) & Bob Huntley during the occupation of Japan, 1945

The fight for shareholders rights is my way of fighting for democracy and rights at home. I will continue to be active as long as I can as an individual shareholder. Not only is it the right thing to do but I also feel compelled to take action when others who should, like most of the big institutional investors, are unfortunately lacking in effort due to cowardice or conflicts of interest.

I was glad to see the very high vote at Haemonetics, which shows the issues I raise are legitimate and have broad public support. [Steiner’s proposal to move to a simple majority standard, for amending both the charter and the bylaws, won 77% of yes/no votes cast.]

Any attempt by Congress or others to disenfranchise shareholders with new rules or laws would be a disgraceful step backwards for all investors and our country. We need political leaders who look out for citizens like President Harry Truman, a great man. I once had the pleasure of meeting him at length once, soon after he left office. Truman was never afraid to take on powerful corporations or special interests. I will continue to fight for our rights and hope other investors will join us. My hero Winston Churchill had the right philosophy: no end, save victory!

Note: William Steiner continues to win significant support for his proposals. For example, his special meeting proposals won 52%, 43% and 42% at CVS Health Corporation, JPMorgan Chase and MetLife respectively. Kenneth Steiner continues the family tradition. For example, his proposal with the Teamsters at Cardinal Health Inc. aims to separate CEO and Chair positions. (Teamsters Push to Strip Cardinal Health CEO of Chairman’s Role)

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General Counsel: Corporate Culture Influencer

Corporate Culture Influencer

On September 11, 2017, the John L. Weinberg Center for Corporate Governance hosted a discussion on the role of the general counsel and how she should be a positive corporate culture influencer. The Center has been working with the Association of Corporate Counsel (ACC) to examine this issue in light of ACC’s recent research and white paper on this topic.  ACC is a global bar association with more than 43,000 in-house counsel members worldwide.  Participating in the discussion were the following;

  •  Veta T. Richardson, president and CEO of the Association of Corporate Counsel. For four consecutive years she has been named to the NACD’s Directorship 100 as one of the most influential leaders in the boardroom and corporate governance community.  Her own expertise was shaped through more than a decade as in-house counsel at Sunoco, Inc., where her practice focus was corporate governance, transactions, securities disclosure and finance.
  • Gloria Santona, who recently stepped down as executive vice president, general counsel and corporate secretary of McDonald’s after three decades at the company. During that time, she worked closely with McDonald’s board of directors as their liaison to senior management.  Gloria also has served as an independent director of Aon Corporation since 2004.
  • Ann Mulé, Associate Director of the Center, moderated the discussion.  Prior to joining the Center, Ann Mulé served as the chief governance and compliance officer, assistant general counsel, and corporate secretary at Sunoco, Inc. where she worked with Sunoco’s Board and Board committees for many years.

Watch the Video on General Counsel as Corporate Culture Influencer

More Information on General Counsel as Corporate Culture Influencer

More information about the role of the general counsel as a corporate culture influencer, including a copy of ACC’s white paper and the complete bios of the discussion participants.

About the Weinberg Center

The John L. Weinberg Center for Corporate Governance, established in 2000, is one of the longest-standing corporate governance centers in academia, and the first and only corporate governance center in the State of Delaware, the legal home for a majority of the nation’s public corporations.

The Center’s mission is to provide a forum for business leaders, members of corporate boards, shareholders, the judiciary, the legal community, academics, students, and others interested in corporate governance issues to interact, learn and teach, with the goal of positively impacting and improving the field of corporate governance and the capital markets.  Center programs, publications and academic research have helped to shape and influence numerous corporate governance debates and developments on a national and international level.

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Moskowitz Winner: CSR & Executive Compensation

Moskowitz Prize Winner Announced

Moskowitz prize winner for 2017 was announced today by the Center for Responsible Business at the Haas School of Business, University of California, Berkeley, in collaboration with The SRI Conference. The prize is named after research pioneer Milt Moskowitz, one of the first researchers to look for the connection between good corporate citizenship and profitability. Sustainable and responsible investing remains the focus.

This year, the Moskowitz Prize acknowledged the superior quality of the paper Corporate Governance and the Rise of Integrating Corporate Social Responsibility (CSR) Criteria in Executive Compensation: Effectiveness and Implications for Firm Outcomes released in September 2017.

The study examined the integration of CSR contracting – that is the linking of executive compensation to social and environmental performance – and how it affects firm-level outcomes. Assistant professors Caroline Flammer (Boston University), Bryan Hong (University of Western Ontario Ivey Business School) and Dylan Minor (Northwestern UniversityKellogg School of Management) conducted the study.

Flammer and her co-authors compiled a new database that aggregates CSR-contracting data collected between 2004 and 2013 from company proxy statements. The authors explored how CSR contracting helps focus managers’ attention on areas that are less salient, but financially material, to the firm in the long term, thereby enhancing corporate governance.

Key findings from the study show that the adoption of CSR contracting leads to:

  • An increase in long-term orientation on the part of managers;
  • An increase in firm value;
  • An increase in social and environmental performance;
  • A reduction in emissions; and
  • An increase in green innovations.

According to Steve Schueth, producer of The SRI Conference and president of First Affirmative Financial Network:

This study provides practitioners of sustainable, responsible and impact (SRI) investing with data that shows how companies that do good also perform well. The authors’ findings add to the mounting evidence that investing in companies that integrate sustainability best practices into their operations does not hinder financial performance, but can improve it – especially for their long-term investors.

“This is a difficult, multifaceted topic, and there has been little direct study of it,” said Lloyd Kurtz, senior portfolio manager, Wells Fargo Private Bank and faculty co-chair, Moskowitz Prize. “The authors’ new database of corporate pay arrangements creates the first really clear picture of the relationships between executive pay, corporate social performance and firm value.”

Moskowitz Prize: Second Prize

In its 22nd year, the Moskowitz Prize also recognized another study Why Do Investors Hold Socially Responsible Mutual Funds? with an honorable mention by authors Arno Riedl and Paul Smeets of Maastricht University.

Lloyd Kurtz and Caroline Flammer will be at The SRI Conference to discuss these and other recent studies that are adding value to the responsible investment industry. This is always one of my favorite parts of the very informative Conference.

Moskowitz Prize: Background

Since its inception in 1996, the Moskowitz Prize has been awarded annually at The SRI Conference. The 28th annual SRI Conference will be held at the Hotel del Coronado in San Diego, California on November 1-3, 2017. Register now to get the conference rate at this historic venue.

The 2017 Moskowitz Prize sponsors are Bailard, Calvert Group, First Affirmative Financial Network, Neuberger Berman, Trillium Asset Management, and Wells Fargo. To learn more about the history of the prize, this year’s submissions and acknowledgements, or for more information about the Moskowitz Prize, please visit the Haas School’s site.

About The SRI Conference

The 28th annual SRI Conference will be held November 1–3, 2017, at the Hotel del Coronado in San Diego, CA. Produced by The SRI Conference and Community, LLC in collaboration with many organizations working to direct investment capital toward the creation of a truly sustainable future, The SRI Conference is the premier annual forum for investment professionals and investors engaged in sustainable, responsible, impact (SRI) investing. Conference participants include investment professionals, institutional investors, and related organizations. The program features educational sessions and opportunities to network with hundreds of like-minded individuals, organizations, and leaders in the field of sustainable, responsible, impact investing.

About The Center for Responsible Business, Haas School of Business, UC Berkeley

Building upon over a decade of research, teaching, and industry engagement, the Center for Responsible Business (CRB) brings together students, company leaders and faculty to develop leaders who redefine business for a sustainable future. The CRB, part of the Institute for Business and Social Impact at the Berkeley Haas School of Business, inspires students, practitioners, and researchers to re-think traditional business practices, envision the roles that they can play in creating change, and obtain the skills to get there.

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Ascendancy of Finance – Reviewed

The Ascendancy of Finance (link) by Joseph Vogl, explains the dramatic transfer of power to  the financial sector that occurred over centuries but accelerated during the recent financial crisis. Traditionally, markets limited state power and were, in turn, restrained by the nation states. As Vogel notes, “In this theoretical myth, spaces of freedom are weighed against concerns of security…” Finance, once a mediator of capital, now threatens to rule both industry and politics.

Ascendancy of Finance: Not an Easy Read

One sentence from the book, which cogently explains where we are with respect to the ascendancy of finance, also provides a good example of the book’s density, aggravated by long complex sentences.

From 2008, in connection with the recent financial and economic crisis, an emergency politics has formed whose quality and character demonstrate a number of basic features: exceptional situations that require extraordinary instruments and measures; negotiations that take place behind closed doors, that are determined by the rhythm of the financial markets, and that clash with the lengthiness of formal procedures, an urgency that forces decisions to fall firmly in favor of the common good; and the informality of powerful executive bodies that might be described as hastily convened ‘committees of public safety.’

The best known “Committee of Public Safety” was created in 1793 as a de facto executive government in France during the Reign of Terror stage of the French Revolution. Are we there yet?

Ascendancy of Finance: One Minute Version

Historically, money creation was the domain of sovereigns. Over time, especially in democracies much of the job of regulating capital reserves and money supply was delegated to central banks, run as semi-independent constitutional anomalies.

In an age of derivatives, algorithmic trading, Bitcoin and other pseudo forms of money, what money does and what it means has become “unpredictable and erratic.” “It remains unclear what precisely can be regulated and how.”

Money and credit are essentially interchangeable and ultimately based on private credit. The generation of private credit is independent of the limits of available money. It is therefore impossible to base the intervention and decisions of central banks on reliable quantities and rules.

Vogl notes that in 1990 all market transactions combined totaled five times global GDP but by 2007 it was seventy-three times. As assets become liquified, price movements have become less correlated to conventional measures of the economy, such as productivity, credit ratings, etc. Financing requirements are met through securitization more than by borrowing from central banks. Credit default swaps “de-risk.” They also make it more difficult to calculate risks and they heighten the spread of contagion.

Control of money creation, liquidity and credit shifted from regulated banks to deregulated financial markets. Central banks have ceased being lenders of last resort, since the finance sector is now creating money. Instead, central banks are now investors of last resort, through quantitative easing, buying securities with money they created to keep financial markets from failing.

Given the massive increase in liquidity, financial innovation, unknowable risk and private money creation, the notion of a determinate and determinable volume of circulating money appears like a ‘historical curiosity, like belief in a ‘flat Earth.’

Of course, as national economies become ‘financialized,’ the finance sector obtains more and more political power. As I read Volga’s critique, I do not see any easy way out. Trump can pull the United States out of the Trans-Pacific Partnership and the United Kingdom can leave the European Union but neither action is likely to forestall the ascendancy of finance. The transfer of public functions to ad hoc bodies continues, undermining the authority of governments and the distinction between public and private. The normative appearance of rationality make transfers most attractive, “precisely where the reliability and efficacy of political structures are lacking.”

In international arbitration courts, major corporations and governments meet on an equal footing. Credit conditions dictate political restructering in countries such as Greece. “Policy-making is pre-empted by market preference.” “The market imprisons the policy-making process.”

Ascendancy of Finance: Takeaway

If I read him correctly, Vogl sees the rise of permanent public debt as one of the primary reasons why expansion of financial markets has led to what he terms “seigniorial power.” He devotes a whole chapter to the term which is too complex to describe as part of a brief review. Priority has shifted to ensure “the vital interests of creditors in the profitable circulation of national debt.”

The crux of our dilemma seems to be that economics has taken the dominant place in determining most human interactions. Seigniorial power seems to be about “diffusing corporate structures throughout the social body.” Risk is individualized. Pensions, healthcare, education are all tied to debt and market fluctuation. Systematic risk is transferred downwards.

About 1,300 corporations dominate 80% of the global economy; 147 (most in the financial sector) control 40% of worldwide profits. Typically, these companies hold a controlling interest in each other. The ascendancy of finance means, they increasingly make the rules.

With the ongoing collateralization and confiscation of the future, they  market itself becomes a creditor-diety, which in the last resort decides the fate of currencies, national economies, social systems, public infrastructures and private savings… financial systems have turned risks into clear and present dangers.

The Ascendancy of Finance presents a convincing explanation of a major threat, not only to democracy but to the individual’s freedom to live a meaningful existence, instead of as an  economic robot. Like Mary Shelley’s Frankenstein, Vogl offers little in the way of recommendations for how to deal with the monster we have unleashed. Shelly warned against ambition as the Creature morned his creator’s death and vanished onto the ice in an act of self-sacrifice. Our creation is much further along and is unlikely to follow suit.

Elon Musk and others have gotten a lot of press about the dangers of out of control artificial intelligence. Vogl’s warning of the ascendancy of out of control finance seems more of a likely near-term problem.

As I have argued elsewhere (The Individual’s Role in Driving Corporate Governance), one solution might be individuals demanding, creating, and utilizing democratic mechanisms within the governing structures of large financial corporations to ensure the convergence of public and private interests. Individuals need to step up and participating as full human beings, not rational economic robots, in governing corporations more democratically. That, in turn, could change the dynamics of finance. However, after reading The Ascendancy of Finance, I am unsure as to where hope lies for Joseph Vogl.

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Center for Political Accountability: Video Friday

Since 2003, the Center for Political Accountability (CPA) has spearheaded disclosure and accountability in corporate political spending. Corporations are the top political spenders at the state and local level. They are a dominant force in shaping public policy. Next proxy season, I will join the Center for Political Accountability in filing proposals on this important topic.

Center for Political Accountability: Citizens United

As I have reminded readers in previous posts, the US Supreme Court’s decision in Citizens United v. Federal Election Commission was based on a false premise. Justice Kennedy’s majority opinion justifies the decision by pointing to the Internet.

With the advent of the Internet… Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.

The decision also said that disclosure

permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.

And the Court expressed enthusiasm that technology today makes disclosure “rapid and informative.” Yet, corporations are not required to make the disclosures to shareowners as Justice Kennedy seems to have believed.

Center for Political Accountability: Collaboration

How can we, as shareowners, hold corporate managers accountable when we do not know what candidates or measures they are supporting? I outlined several strategies in Citizens United: Five Years Later. One such strategy is filing resolutions in partnership with the Center for Political Accountability. Other efforts have included:

  • The Conference Board published The Handbook on Corporate Political Activity, featuring CPA as lead author, in 2010.
  • The annual CPA-Zicklin Index of Corporate Political Disclosure and Accountability (launched in 2011) is compiled with the Zicklin Center for business Ethics Research at The Wharton School at the University of Pennsylvania.
  • Roundtables examining corporate political activity and its risk have been held with The Wharton School, New York University’s Stern School of Business, Baruch College’s Zicklin School of Business, UCLA School of Law, and Columbia Law School.
  • The first business school course on corporate political engagement and executive statesman (launched in 2015) was offered by the Stern School. (see Corporate Political Power (BSPA-GB.2356.30 – 3 credits)

Center for Political Accountability: Accomplishments

  • 305 companies are disclosing some or all of their political spending with corporate money.
  • More than 150 large companies – including more than half of companies in the influential S&P 100 – have struck political disclosure agreements with CPA and/or its shareholder partners.
  • Companies have disclosed at least $83 million in previously hidden payments made to six leading politically active trade associations over the past two election cycles.
  • 68 companies are disclosing and/or restricting their dark money payments to trade associations and 501(c)(4) nonprofit groups.
  • You can read the annual CPA-Zicklin Index, the first comprehensive benchmarking of large public companies for disclosure and accountability. The Index shows that disclosure is becoming a mainstream corporate practice.
  • You can learn about best practices for managing and overseeing company political spending in The Conference Board’s Handbook on Corporate Political Activity, which featured CPA as the lead author.
  • You can read the Harvard Business Review’s A Board Member’s Guide to Corporate Political Spending, which includes a checklist of effective steps and guidelines for directors in reviewing political spending, co-authored by CPA.


Center for Political Accountability: Donate

The Center for Political Accountability (CPA) is a 501(c)(3) nonprofit, nonpartisan organization. All donations are tax deductible to the fullest extent allowed by law.

How to donate.

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CII: Climate Competency & Risk

Shifting Investor Perspectives on Climate Risk & Board Climate Competency

These notes on climate competency are my last post from the Council of Institutional Investors Fall 2017 conference.  Find more at .  As a member of the press, I was excluded from the policy-making meetings. Still, it was a great opportunity to touch base with members of CII and to learn of recent developments and where we may be headed.

The panel discussion on climate risk and board competency hosted by the 50/50 Climate Project and the New York City Comptroller’s Office. From the program: Continue Reading →

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IRRCi Research Award Submissions Due

IRRCi Research Award Submission Deadline is October 6, 2017. Two categories: Practitioner and Academic. Winners to Receive $10,000 each and get to present at the 2107 influential Columbia University Millstein Center Forum.

The Investor Responsibility Research Center Institute (IRRCi) is accepting submissions through October 6, 2017, for its sixth annual competition for research that examines the interaction between the real economy and investment theory.

Practitioners and academics are invited to submit research papers by October 6, 2017, for consideration by a blue-ribbon panel of judges with deep finance and investment experience.

Two research papers – one academic and one practitioner – each will receive the 2017 IRRCi Research Award along with a $10,000 award. The winning papers will also be presented at the Millstein Center for Global Markets and Corporate Ownership at Columbia University in December 2017 in New York City.

The panel of respected judges includes:

  • Robert Dannhauser, Head of Capital Markets Policy, CFA Institute
  • James Hawley, Professor and Director of the Elfenworks Center for Fiduciary Capitalism at St. Mary’s College; Head of Applied Research for TruValue Labs
  • Erika Karp, Founder, CEO and Chair of the Board of Cornerstone Capital
  • Nell Minow, Governance Expert and Huffington Post Columnist

Biographies of the judges are available here. Additional judges may be added.

“This award has become both high profile and highly valued. It shines a remarkably strong spotlight on academic and business research that dissects and analyzes pressing investment issues,” said Jon Lukomnik, IRRCi executive director. Lukomnik continued:

Last year’s two winning papers both offered important contributions to the global debate on the need for businesses to maintain a long horizon focus in a short-term world. But whether it is investor time frame, sustainability concerns or insider trading in the derivatives markets, the papers have constantly been high quality. That, in turn, has attracted widespread attention to the winning papers.

Award submissions are accepted online. Submissions may be an original work created specifically for the IRRCi Research Award, or relevant unpublished papers, or papers that have been published after July 1, 2016. Winning papers will be presented at the Columbia University Millstein Center’s conference, published by the IRRCi on its website, and distributed to some 6,000 individuals interested in the organization’s research.

IRRCi Research Award: Background

As noted on the IRRCi web site, Modern Portfolio Theory (MPT) has dominated investment theory for a half century. MPT focuses on security selection, portfolio construction, and other financial issues rather than the intersection of the real economy and investing. Simultaneously, the growing importance of the private sector relative to the public sector in the real economy has increased scrutiny of private sector behavior and economic activity. The IRRCi Research Award encourages new research that analyzes how investments interact with real world economic activity.

More information regarding the award process, submission guidelines and calendar is available here, along with the award submission form and Frequently Asked Questions.

Information on past winners is available here. More information about the award is available here. Read the full body of IRRCi research here.

About IRRCi

The Investor Responsibility Research Center Institute is a nonprofit research organization that funds academic and practitioner research enabling investors, policymakers, and other stakeholders to make data-driven decisions. IRRCi research covers a wide range of topics of interest to investors, is objective, unbiased, and disseminated widely.

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