The recently released 2015 CPA-Zicklin Index reveals some noteworthy findings about the political spending-related practices of the S&P 500 that would appear to counter the perceived need by some for SEC rulemaking in this area (legitimate concerns about the information meeting any requisite disclosure materiality threshold notwithstanding), including:
– Majority of companies have a political spending webpage: 54%, or 270 companies, had a dedicated webpage or similar space on their websites to address political spending and disclosure.
– Most companies have policies addressing political spending: Over 87% (435 companies) had a detailed policy or some policy governing political spending on their websites.
– Many companies have placed restrictions on their political spending: 25% (124 companies) placed some type of restriction on their political spending. This included restrictions on direct independent expenditures; contributions to candidates, parties and committees, 527 groups, ballot measures, or 501(c)(4) groups; and payments to trade associations for political purposes.
– Over 40% of companies have some level of board oversight of their political contributions and expenditures:
- Board oversight: 215 companies (43%) said their boards of directors regularly oversaw political spending.
- Board committee reviews policy: 151 companies (30%) said that a board committee reviewed company policy on political spending.
- Board committee reviews expenditures: 169 companies (34%) said that a board committee reviewed company political expenditures.
- Board committee reviews trade association payments: 121 companies (24%) said that a board committee reviewed company payments to trade associations.
Access heaps of resources on this topic in our “Political Contributions” Practice Area.
House Letter to SEC Urges Abstention from Political Spending Disclosure Rulemaking
In October, House Committee on Financial Services Chair Jeb Hensarling and Subcommittee on Capital Markets & Government Sponsored Enterprises Chair Scott Garrett sent this letter to SEC Chair White urging her to refrain from moving forward on any rulemaking that would mandate corporate political spending disclosure. The letter claims that such rulemaking efforts would be “a waste of the SEC’s finite resources” on a controversial, discretionary rule that would reflect a deviation from the materiality standard articulated by the US Supreme Court in TSC Industries v. Northway, which Chair White reportedly endorses.
The letter also notes that a recent letter to Chair White from several U.S. Senators urging the SEC to mandate disclosure in this area failed to mention the materiality standard – focusing instead on non-securities law concerns that reflect a philosophical disagreement with the Supreme Court’s 2010 Citizens United decision.
More on “The Mentor Blog”
We continue to post new items daily on our blog – “The Mentor Blog” – for TheCorporateCounsel.net members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:
– Board Risk Committee Considerations
– Industry Group Proposes XBRL Guidance
– New COSO Framework Gaining Steam
– Survey: Implications of Board Gender Diversity
– Board Succession Planning: Chess vs. Checkers
– by Randi Val Morrison