Shareowner organizations are working together to advance a three-pronged response to the last month’s U.S. Supreme Court decision providing much greater latitude to corporations making campaign contributions:
- Direct engagement of management at publicly traded companies, modeled on the work done by Bruce Freed at the Center for Political Accountability and a number of institutional shareholders, as well as under the guidelines of the Council of Institutional Investors (CII). That engagement through shareholder resolutions and one-on-one company “dialogues” typically involves (1) disclosure of a company’s soft money contributions, payments to trade associations and other tax exempt organizations used for political purposes, and grassroots lobbying expenditures; (2) disclosure of a company’s policies and procedures for political contributions and expenditures; (3) identification of persons participating in decision-making on the contributions and expenditures, and (4) board oversight of the company’s political contributions and expenditures.
- Outreach to the Securities and Exchange Commission (SEC), through both the Investor Advisory Committee and a direct petition requesting SEC rulemaking in this area.
- A letter to Congress from the shareholder community asking lawmakers to ensure that shareholders have all tools they need to ensure that decisions about political spending by public companies does not erode shareholder value and the long term sustainability of the company.
More information available at ShareOwners.org. Can shareowners wrench control over the corporations they own before managers consolidate their already often dominate positions over boards and Congress? Will company funds pour into political campaigns that benefit a broad base of long-term shareowners whose interests are closely aligned with that of the whole nation, or will they be used to reinforce a greedy few?
Robert A.G. Monks said: “The bad news is that Citizens United represents the worst judicial decision since Dred Scott; the good news is that the Supreme Court of the United States has held that there is such a thing as corporate democracy. Now is the time for shareholders to put that democracy to work to protect their own interests against boards that may want to ‘play politics’ and have no clue as to how to do so without devaluing their companies.”