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Shareholders know little about corporate gifts to political parties and groups. Under current political donation disclosure rules, companies are not required to report political donations. Only political contribution recipients must report them. This makes it difficult for shareholders to learn about or track these expenditures. The problem is exacerbated by the fact that many boards of directors conduct little serious oversight of these expenditures.
Corporate executives have substantial discretion in the political contributions they make with corporate funds. The absence of company disclosure and oversight by boards of directors gives them license to direct those funds as they please.
We believe a significant amount of money has been used to finance agendas that are antithetical to the interests of companies and their shareholders. For example, SBC Communications, Bell South, Union Pacific and Altria Group have contributed to Americans for a Republican Majority, a group which in turn funds groups like the Traditional Values Coalition who are opposed to gay rights. This agenda conflicts with the stated policies of the donor companies, who have committed to prohibiting discrimination in hiring based on sexual orientation and provide benefits to same sex partners. Some even fund special programs for gay and lesbian employees.
Absent a system of accountability, corporate executives will be free to use company assets for political objectives that are not necessarily shared by and may be inimical to the interests of companies and their shareholders.
Some leading companies including companies like Morgan Stanley, Johnson & Johnson and Pfizer have agreed to publish their corporate political contribution policies and contributions.
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