Less than two years after a landmark US Supreme Court ruling removed barriers to ‘electioneering activity’ by corporations and unions, a handful of the largest US companies seem to be saying No, thanks.
A survey of practices at the S&P 100 reveals that two dozen of the largest US corporations have publicly opted out of political spending funneled through independent committees, as allowed by the Supreme Court Citizens United decision.
Independent committees are also known as 527 organisations, named after the Internal Revenue Code section that defines them.
In addition, 57 out of 100 companies surveyed voluntarily report their political expenditures and have instituted policies including board oversight over those expenditures, while 43 provide information about their political spending channeled through independent committees and trade associations.
These are among the key findings released recently by the Washington, DC-based non-profit centre for Political Accountability (CPA) and the Carol and Lawrence Zicklin centre for Business Ethics Research at the Wharton School of Business.
The CPA-Zicklin Index of Corporate Political Disclosure and Accountability indicates that ‘disclosure is becoming a mainstream practice,’ says CPA founder and president Bruce Freed.
‘A significant number of companies recognise the risk associated with political spending and a growing number are not taking advantage ofCitizens United, at least not directly. These are the influential companies that set the trends for other companies and key groups.
‘But there are real gaps and a great deal of work needs to be done. What this shows is that there is movement in the direction of exposure and accountability.’
Four companies – Colgate-Palmolive, Exelon, IBM and Merck – were all given a perfect score of 100 for political transparency and accountability, based on 29 criteria measuring disclosure, policy and oversight.
10 companies scored zero on the index: Amazon, Baker Hughes, Berkshire Hathaway, Cisco Systems, Costco, CVS Caremark, Devon Energy, Halliburton, Lowe’s Co, and MasterCard.
The CPA-Zicklin Index scores some of the largest blue chip companies in America, based on information on their websites, across 29 different measures gauging their disclosure, policies and oversight of political spending two years after the Citizens United decision.
One company in the S&P 100, Philip Morris International, does not have operations in the US and thus was excluded from the survey. In 2012 the index will be expanded to rate the policies and practices of the S&P 500, CPA says.
The CPA-Zicklin Index is similar to another ranking of the S&P 100 on political disclosure issued by Baruch College in September. That index also scores companies on how easy the information is to find on their websites.
[Article by Brad Allen, Inside Investor Relations]
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