Corporate Political Spending Message: Boards Should Get Handle on Process

by Gary Larkin

Of all the messages coming out of The Conference Board Committee on Corporate Political Spending Symposium Thursday, there was one that resonated the most with public boards.

To put it succinctly, that message is that no matter how politically active a company may be, it is imperative that boards should make sure management has in place a process to track such expenditures, compile them and, when appropriate, disclose them. The new report from the committee, Corporate Political Spending: Policies and Practices, Accountability and Disclosure, [click here for a copy of the report] states: "...disclosure of corporate political spending in the context of the business strategies, principles and policies that guided those decisions may make a company less vulnerable to the risk of unwarranted allegations."

Timothy Smith, senior vice president and director of ESG (Environmental, Social and Governance) Shareowner Engagement for Walden Asset Management, specified three reasons a board should be concerned about corporate political spending.

"There is risk, such as the risk of having a company executive donating to a campaign that the corporate office did not know about," Smith told attendees at the symposium in New York City. "[There is] seeking transparency -  knowing if checks and balances are in place and how monies are spent directly or indirectly. And [there is] accountability -  knowing what a company does and how they do it."

Read the rest of this article on the Governance Center Blog

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