New Index Looks at S&P 100 Corporate Political Spending Policies and Practices

New Index Looks at S&P 100 Corporate Political Spending Policies and Practices

by Melissa Aguilar

With the 2012 presidential and congressional elections hurtling toward us and another proxy season just around the corner, the topic of corporate political spending is looming large, as U.S. companies weigh decisions on whether, how, and to what extent to spend corporate funds to contribute to political campaigns and advocacy organizations.

The topic of corporate political spending has been front and center since the January 2010 Supreme Court decision in Citizens United v. Federal Election Commission [an enhanced version of this opinion is available to lexis.com subscribers] . A great deal has been written on the decision, the impact, and the response by both the private and government sectors. Last Friday, the issue was brought front and center again with the release of a new index of the S&P 100 by the nonprofit Center for Political Accountability (CPA).

CPA, which has been urging companies to adopt disclosure and oversight of corporate political spending, and which coordinates many of the shareholder proposals on the issue, has begun benchmarking the practices of companies in the S&P 100. CPA teamed with the Zicklin Center for Business Ethics Research at The Wharton School of the University of Pennsylvania to develop the CPA-Zicklin Index of Corporate Political Disclosure and Accountability, which ranks S&P 100 companies on their policies, disclosure and oversight related to corporate political spending. The Index excludes Phillip Morris International, which has no operations in the United States.

CPA president Bruce Freed says the index shows that, “Companies are adopting restrictions on corporate political spending because of shareholder engagement. And they are doing it voluntarily. The trend is toward disclosure by management and board oversight since political spending does pose a serious risk.” Freed co-authored the 2010 Conference Board Handbook on Corporate Political Activity and serves as chair of the advisory group for The Conference Board Committee on Corporate Political Spending.

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