Calls grow for political spend reporting

Investors and academics have made moves to force the US government’s hand on the disclosure of corporate political spending.

The International Corporate Governance Network (IGCN) – which counts Coca-Cola, Hermes and the California State Teachers’ Retirement System among its members – has seconded a call from law professors urging the Security & Exchange Commission (SEC) to draw up rules to make all public firms report political spending to shareholders.

The Committee on Disclosure of Corporate Political Spending, chaired by Lucian Bebchuk and Robert Jackson of Harvard and Columbia universities respectively, said in a petition to the SEC: “Shareholders in public companies have increasingly expressed strong interest in receiving information about corporate spending on politics, and such spending is likely to become even more important to public investors in the future.”

“Furthermore,” the letter said, “shareholders need to receive such information for markets and the procedures of corporate democracy to ensure that such spending is in shareholders’ interest.”

The London-based IGCN said that, while it “recognises that corporate political activity can be positive”, it was in investors’ interests to seek “robust disclosure” of these activities, and how they relate to the use of company resources.

The move follows the Supreme Court’s controversial Citizens United versus Federal Election Commission, which extended the rights of companies and other organisations to provide funds for political purposes, allowing the unlimited corporate funding of certain political campaigns.