All eyes seem to be on Wall Street these days, which is turning out to be good timing both for soul-searching CEOs and for reform activists taking aim at corporate money.
A far-flung corporate reform coalition is pushing to give shareholders a bigger voice in American companies’ political spending decisions, both through federal and state legislation and through new regulations at the Securities and Exchange Commission.
“Companies seeking political advantage actually might not be doing their shareholders any favors,” said Lisa Gilbert, deputy director of Congress Watch at Public Citizen, which is spearheading a strange-bedfellows coalition that includes some 75 government watchdog, labor and environmental groups, along with several prominent academics and corporate accountability advocates.
The coalition’s immediate focus is the Securities and Exchange Commission, which organizers argue is well-positioned to require more disclosure from companies engaged in political spending. In August, a group of 10 corporate and securities law experts petitioned the SEC to develop rules to require public companies to disclose all of their corporate political activities to shareholders.
“We all think that shareholders have a right to know what’s going on,” said Gilbert, who noted that the coalition is pushing to gin up a wave of public comments to the SEC on the petition. The coalition is also backing legislation both on Capitol Hill and at the state level that would require companies to report their political expenditures to shareholders.
Coalition members also plan to demonstrate at the shareholder meetings of several major corporations during proxy season this spring, targeting big companies such as AT&T, Bank of America Corp. and Goldman Sachs Group Inc. Shareholders already voiced objections at Target Corp.’s annual meeting this year, following a controversy and boycott involving Target’s political expenditures last year.
Shareholder support has grown in recent months for proxy resolutions that seek greater accountability and disclosure from companies that spend money on politics. The Center for Political Accountability, which endorses corporate watchdogs, partnered with 17 shareholder organizations on a letter to more than 400 CEOs, calling on them to join 88 major companies that have voluntarily agreed to involve their boards in and publicly disclose their political spending.
“My concern is that the corporate oversight of these kinds of contributions is fairly nonexistent,” said Julie Goodridge, CEO of NorthStar Asset Management Inc. of Boston. “And as shareholders, we can find ourselves in deep trouble. Shareholder value can diminish, and the company can be incredibly embarrassed because their brand and their reputation is at risk.”
Goodridge filed a petition without success on behalf of NorthStar on Tuesday at the Cincinnati shareholder meeting of Procter & Gamble Co., asking the company to give shareholders a say in its political giving decisions.
NorthStar accused Procter & Gamble of making political contributions at odds with its company values. Procter & Gamble has broad nondiscrimination policies for gay employees, for example, but according to a NorthStar analysis, some 40 percent of its political action committee contributions since 2009 have gone to lawmakers who voted in favor of “marriage protection legislation” and against repealing the now-defunct “don’t ask, don’t tell” policy that prevented openly gay service members in the military.
Rep. Elijah Cummings, D-Md., right, hugs Harold Schaitberger, General President of the International Association of Fire Fighters, after the Congressman spoke at the IAFF's Legislative Conference General Session at the Hyatt Regency on Capitol Hill, March 9, 2015. The day featured addresses by members of Congress and Vice President Joe Biden.