Political spending to support controversial policies and leaders thrives in darkness. And no spending has defied necessary scrutiny more than the bigger and bigger donations that public corporations are giving to state attorneys generals through partisan third-party groups.
“The index is recognized by companies as credible and serious. It is respected,” Bruce Freed, CPA president, told DMI. “Increasingly, companies want to be ‘Trendsetters’ (achieving scores of 90+ out of 100) that they can tout to show their best practices. In the 2023 index, 39% of the S&P 500 were in the top quintile.”
Even if executives hope to steer clear of this election, “if they engage in political spending, they’re speaking,” said Bruce Freed, president of The Center For Political Accountability, which has pushed for spending disclosures. “They won’t be sitting it out. As long as they’re giving, that creates risk because of what it associates them with.”
There’s a noticeable trend in the S&P 500 towards political disclosure and accountability becoming the norm, with a significant percentage of companies scoring high on the CPA-Zicklin Index of Corporate Political Disclosure and Accountability.
The purpose of this primer is to help incoming directors understand the ins and outs of corporate political spending and protect their companies from risks posed by this spending.
Freed told Popular Information that the corporations sending millions in PAC donations to election deniers are “putting themselves at risk.” He thinks the companies are underestimating the economic danger of undermining “the rule of law.” Instead of focusing on the preservation of “the political system that they need to be able to operate and grow,”…
A rush of shareholder proposals demanding transparency have been filed for the 2024 proxy season, with a strong emphasis on lobbying alignment.
With corporate political disclosure and accountability accepted as the norm, the next step for companies is to put in place a framework for approaching, governing and assessing their election-related spending.
The vast majority of companies utilize various forms of public policy advocacy to impact legislative and regulatory decisions mainly through lobbying and campaign contributions.