TheCorporateCounsel.net

A new survey commissioned by the folks behind the CPA-Zicklin Index shows widespread public support for improved governance of corporate political spending. Here are some stats from the survey summary:

– Nationwide, 87% believe that public corporations should be required to have a code of conduct to assess and govern their political spending.
– Similarly, 91% want procedures adopted that would ensure that corporate political contributions are lawfully spent and are consistent with public policies that benefit the company in which they are financially invested.
– Stockholders also feel that a code of conduct would improve a company’s political spending decisions (67%) and give them more confidence in their investment (79%).
– They also believe corporations need to consider the impact of their political spending on broader society (77%).

These survey responses make sense when looking at the Center for Political Accountability’s new report, Corporate Underwriters: Where the Rubber Hits the Road, focused on the impact of corporate political spending on politics — particularly at the state level. The report is intended to provide executives with a guide “for thinking about how to engage with the political process and how to spend corporate treasury funds.”

The report found that political spending by public companies plays “a major role in financing highly contested state political races through third-party 527 groups.” Public companies and their trade associations have contributed more than $1 billion (40% of all funds collected) to “527 Committees” (Republican & Democratic Governors Associations, Attorneys General Associations and State Leadership Committees) and influenced elections that have “reshaped policy and politics” and “had a major impact on our democracy” — including by state attorneys general using lawsuits and briefs to “drive national policy from the state level.” Gosh, that sounds familiar!

For further background, Cooley’s Cydney Posner did a deep dive on the report and risks to companies of public scrutiny of political spending. For companies looking to improve their governance in this area — or when controversies or other developments cause these risks to materialize — the report recommends the CPA-Zicklin Model Code of Conduct for Corporate Political Spending as a means to examine the full consequences of a company’s political spending and better understand the risks of political spending decisions.

– Meredith Ervine