Representatives of three major U.S. companies, including two industry giants, affirmed at a business-academic Roundtable their embrace of political transparency as a key element of sound corporate governance.
Dan Bross, Microsoft’s Senior Director for Corporate Citizenship, Peggy Foran, Chief Governance Officer and Corporate Secretary for Prudential Financial, Inc., and Arnold J. Johnson, Senior Vice President, General Counsel and Corporate Secretary for Noble Energy spoke at the late February Roundtable at New York University's Stern School of Business.
The two-day session addressed “The Importance of Educating Future Business Leaders Beyond Citizens United.” Joining the Center for Political Accountability in co-sponsoring the Roundtable were NYU's Stern School; the Zicklin Center for Business Ethics Research, part of The Wharton School at the University of Pennsylvania; and Baruch College’s Zicklin School of Business.
“In order to be a successful company and compete in the global marketplace, and to return value to our shareholders, we very firmly believe companies have to participate in the political process,” said Microsoft’s Bross. Determining how it does so comes down to corporate governance, he said, defining both guidelines and practices “and how are we going to hold ourselves accountable for those policies and practices.”
Outlining a multifaceted political engagement program, Bross said, “We are trying to do as good a job as we can at being transparent and open because we believe all of you and anyone who comes to our website, or an investor at Microsoft, should have access to this information.”
The company is required to file certain information with state and federal bodies, he said, “[S]o why shouldn’t we make this information available? I am personally challenged to understand where some companies are coming from when they just have a real visceral reaction to disclosing the information that they are required to file publicly.”
Prudential’s Foran described a company where corporate governance involves both a long-term and broad view. “The long term is very important for us. And how we are viewed by our employees, and how we’re viewed by our community, and how we’re viewed by our shareholders is critical to us,” Foran said. “I think it really does come to transparency and oversight.”
“While I am a lawyer, I have to admit to you I don’t believe that the major goal is maximizing profits for the short term,” Foran noted. “I really believe that you have to look at that in the lens of all stakeholders, you have to look at it in the very, very long-term lens.”
Noble Energy’s Johnson declared at the outset, “For companies like us, [having] high business ethics is also a competitive advantage.” In this context, he continued, corporate governance “goes not only to the integrity of your process and what you’re trying to do but I think it’s a nice check and balance within your corporation.”
He has realized in recent years, Johnson said, “We’re at the point in the corporate world where I think transparency is critical, but it needs to be good and understandable transparency.” Noble Energy adopted its current disclosure policies after it was presented with a shareholder resolution, and Johnson met in Washington with the Center for Political Accountability.
“To me,” Johnson said, “it was just an energizing conversation to realize, why wouldn’t this make sense? Why wouldn’t good disclosure in so many areas make sense? Our board fully embraced it.”
The business leaders were asked whether they like the idea of a Securities and Exchange Commission rule requiring corporate political disclosure.
Johnson said that on one hand, companies currently making such a disclosure would lose what he considers a competitive advantage if “everybody’s doing it” because of a SEC rule. On the other hand, he said, “The one benefit I see sometimes to the regulatory side is at least you have some consistency in what is being sought and what is being required.”
Noble Energy was one of two companies that tied for the highest ranking in the 2014 CPA-Zicklin Index of Corporate Political Accountability and Disclosure, with 97.1 points. Microsoft received 92.9 points and Prudential Financial, 88.6 points.