Tag Archives | transparency

Mutual Funds Hold Back Political Spending Transparency

Mutual Funds Hold Back Political Spending Transparency

Mutual Funds Hold Back Political Spending Transparency

A Public Citizen report shows mutual funds hold back political spending transparency through their proxy voting behavior. Fully 64% of political spending disclosure shareholder proposals would have passed with majority support if major mutual funds owning more than 5% had voted in favor of them in 2016.

The report, released during a telephone press conference last week, calls on the nation’s largest mutual fund companies to support political spending disclosure. Press conference participants included US Sen Robert Menendez (D-N.J.); John Coates, professor of law and economics at Harvard Law School; and Patrick Doherty, director of corporate governance for the Office of the New York State Comptroller.

For years shareholders have been pushing companies to disclose information critical to shareholders’ ability to evaluate their investments. Major mutual fund companies can and should play a pivotal role, according to Public Citizen and its partners in the Corporate Reform Coalition. Continue Reading →

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Trump’s LL Bean Political Contributions

LL Bean LogoDo not make the same mistake as LL Bean. The last thing I want is to turn CorpGov.net into another social media outlet on Donald Trump. However, the advice offered today by Bruce Freed, president of the Center for Political Accountability (CPA), is something public company boards should be discussing as they try to stay on the good side of President-elect Donald Trump, without being ethically challenged.

While, the advice flowed out of the controversy over President-elect Donald Trump’s endorsement of LL Bean following a contribution to a political action committee supporting Mr. Trump from a Bean family member, it closely tracks advice CPA has been giving for years.  Continue Reading →

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Governance, Disclosure and Share Price

Correlation

Correlation from XKCD.com

Good corporate governance means quicker, more frequent disclosures to the stock market. Or does it? The evidence varies by country, and in our research we wanted to check the relationship.

We used cross-country data from 23 OECD countries, firms with financial years ending between 1 January 2003 and 31 December 2008. We looked at company announcement information from more than 2,000 different firms, and share prices relating to 5,800 different firms. Continue Reading →

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Citizens United: Five Years Later

Citizens United and Pay 2 PlayFive years ago today the US Supreme Court held that corporations could spend unlimited  funds on election campaigns in their decision, Citizens United v. Federal Election Commission. Last night I joined about 100 people a local showing of Pay 2 Play: Democracy’s High Stakes.  I highly recommend it. See the film with a group and leave plenty of time to talk what you can do to overturn the impact. The film suggests a number of reasonable solutions but as I have discussed before, the Court’s decision gave investors a special role.

Justice Kennedy’s majority opinion justifies the Supreme Court’s decision by pointing to the Internet. Continue Reading →

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Investors Back Global Tax Reform and Transparency

g20Australia

Global Tax Reform and Transparency Urged

LAPFFIn a global first, a group of institutional asset owners and managers are jointly calling for comprehensive transparency and disclosure to be adopted as core principles in reform of the international taxation system to be put before the G20 Leaders Summit in Brisbane this weekend.

The group including the £150B UK Local Authority Pension Fund Forum (LAPFF), Quebec fund Batirente, Royal London Asset Management (RLAM), Paris based OFI Asset Management & Triodos Investment Management from the Netherlands have issued a  statement supporting the initial stage of the OECD BEPS Action Plan and urging a general improvement in corporate governance, transparency and disclosure  standards around taxation issues.  Continue Reading →

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Quicker Disclosure of Ownership Petitioned – Updated

NYSE Euronext, NIRI (National Investor Relations Institute) and the Society (Society of Corporate Secretaries & Governance Professionals) submitted a joint petition to the SEC requesting the SEC to reduce the time frame under which investors are required to report their holdings from 45 business days after the end of the quarter to two business days after the end of the quarter. Currently, the Exchange Act requires quarterly reporting, so a further reduction than quarterly reporting would require an act of Congress. Continue Reading →

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CalSTRS to Stream Meetings

With all the criticism lately of public pension funds it is good to see increasing transparency on several fronts. CalPERS, for example, recently announced they will essentially be posting travel claims. (CalPERS Boosts Transparency: Will Post Travel Expense Claims) Now, CalSTRS has stepped up from live audio streaming to live video streaming and archiving of its meetings on the Web. (CalSTRS Board OKs Video Transmission of Meetings, PlanSponsor.com, 11/5/2010) Hopefully, if the public can see what is going on, both the funds and the public will better understand each other.

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Shorting the Least Transparent

24/7 Wall St. reviewed the performance of 50 companies Audit Integrity rated “Least Transparent” in the month of June, including three with“Insider Trading.” Among the largest companies in the list, the average return was a negative 8.6% in June compared to a drop of 7.75% for the Russell 1000. Smaller companies fared worse, with an average return for June of a negative 13.83%.  (The 24/7 Wall St. Fifty Least Trustworthy Companies in America, A Look Back, 7/13/10. Hat tip to Sanford Lewis.)

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Open Government: Lessons for Corporate Governance

Daniel Lathrop and Laurel Ruma have edited a new volume, Open Government: Collaboration, Transparency, and Participation in Practice. Although the book is focused on civil governments, I found lessons here for corporate governance as well.

For example, the chapter by Douglas Schuler discussed online deliberation, including the work of e-Liberate, which developed an online version of Roberts Rules of Order to facilitate online deliberations. The system in its current form can support meetings that take place in real-time over an hour or so and, also, meetings that are more asynchronous (and leisurely), meetings that could, in theory, span a year or so, making it necessary for meeting attendees to log in to e-Liberate once or twice a week to check for recent developments and perhaps vote or make a motion. Might not such a system be useful for facilitating online shareowner forums, shareowner collaboration in deciding on proxy access candidates, or even annual shareowner meetings?

David Eaves builds off the work of Clay Shiky who looked at Ronald Coase’s, The Nature of the Firm. Coarse theorized the people didn’t self-organize in a manager-free environment because managing transaction costs – the costs of constantly negotiating, coordinating and enforcing agreements – would be prohibitive.  In Here Comes Everybody: The Power of Organizing Without Organizations, Shiky asks, “But what if transaction costs don’t fall moderately? What if they collapse?” The Internet seems to make that possible. Eaves cites the DIRECT Launcher project, where NASA and non-NASA employees created a virtual “skunk works” to design a rocket that outcompetes NASA. Eaves argues that with the acknowledged end of objectivity, sites like Wikipedia have increased credibility because their transparency documents partisanship. You can trace bias. Eaves goes on to discuss many self-organizing tools that I think might be readily adaptable to ShareOwners.org, CII and others. Other variations are discussed by Charles Armstrong. For example, One Click Organizations utilize the Themis Constitution developed by CIRCUS Foundation, designed to take advantage of electronic decision-making to simplify governance and administration.

Sarah Schacht takes us back to the fundamentals of democracy, points made in the Constitution,  like the fact that a Journal of the Proceedings of Congress shall be published with Yeas and Nays of Members voting for and against bills. Of course, we can’t have Board minutes released right after meetings but wouldn’t it be reasonable to release minutes or at least votes after some reasonable amount of time… perhaps a year later, unless otherwise deemed strategically critical to remain secret? How can we hold our board members accountable if we never know how they vote?

If corporate directors really begin to represent shareowners, rather than CEOs and self-replacing boards, they might learn a thing or two from TweetCongress.org. Then there’s Sheila Krumholz’s discussion about why the Center for Responsive Politics decided to publish their data on OpenSecrets.org, which reminds me of decisions by funds to disclose their proxy votes at ProxyDemocracy.org. It turns out giving away what may cost tens or hundreds of thousands of dollars to compile can actually increase your clout and help better fulfill your mission than hording information like gold.

Another site all in governance can benefit from is Many-Eyes.com, which facilitates the ability to upload data, visualize it, and talk about it with other people. Explore your data through word tree maps, bubble charts, phrase net, tag clouds, etc. Visualization provides powerful insights.

That’s just a few observations on a few chapters. Open Government contains 34, so there is a great deal to explore. VoterMedia.org, which improves the accountability of elected leaders by letting you vote on funding for websites/blogs that cover how you are being represented. This can improve policies and reduce corruption in organizations, including governments, corporations, unions, nonprofits etc.. However, Lathrop and Ruma have done an excellent job of compiling a list of useful sites and essays that will go far in creating more open governments… whatever their form. (see also, Corporate Accountability, Web 2.0 & CorpGov Functions at Public Funds)

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