ADVOCACY POSITION: Political Spending

Corporate Political Spending Disclosure


Bruce Freed
President, Center for Political Accountability

“Dark money” spending by third-party political organizations poses an even more serious risk to companies as they face growing pressures to contribute. To address the threat, the Center for Political Accountability (CPA) and its shareholder partners will be filing resolutions at more than 50 companies in the 11th year of CPA’s advocacy and engagement effort.

An increasing number of companies recognize the value of political disclosure as demonstrated in the 2013 CPA-Zicklin Index of Corporate Political Disclosure and Accountability. The Index showed that, among the top 200 companies of the S&P 500, 78 percent improved their overall score, and the number of companies receiving top scores almost tripled between 2012 and 2013. Overall, the average score for all companies in the Index jumped from 38 in 2012 to 51 in 2013.

Mainstream shareholder support for corporate political disclosure resolutions also increased in 2013. According to the 2013 Mutual Fund Voting Study by CPA and Fund Votes, which studied 40 large U.S. mutual fund families’ voting records, support for these resolutions reached a new high. The funds backed corporate political disclosure resolutions about 39 percent of the time, up from a previous high of 35 percent in 2011. In addition, for the first time, a mutual fund’s proxy voting policy included a general support for the disclosure of corporate political spending, at MFS (formerly known as Massachusetts Financial Services). MFS supported all of the political spending resolutions it voted in the 2013 proxy season.

Last year, CPA and its shareholder partners, including public and union pension funds, socially responsible investment firms, religious institutions, and individual investors, filed almost 50 resolutions and reached agreements with 15 companies. Average shareholder support reached 32 percent, with 15 resolutions receiving over 30 percent support. At CF Industries, the resolution filed by the New York State Common Retirement Fund received 66 percent; the company recently reached an agreement with the proponent and made the requested disclosure.

In addition to engaging companies, CPA recently introduced the corporate political spending issue and the case for political disclosure and accountability to international investors, in an article in the International Corporate Governance Network’s (ICGN) 2013 Yearbook. It is also continuing its work with leading business schools to create a corporate political accountability curriculum. Lastly, CPA will expand the CPA-Zicklin Index, its annual benchmarking study, to cover the top 300 of the S&P 500 companies in 2014. For the past two years, it reviewed the top 200 companies in the S&P 500.

For more information, download Proxy Preview 2014 to find more political spending shareholder resolutions.