TheCorporateCounsel.net

I don’t know about you, but I can’t wait for next Wednesday when the relentless political advertising on television will cease. I much prefer the mindless advertising about bathroom renovations and big screen TV sales that dominate the airways when we are not in an election season. I also yearn for a time when politics is boring. Boring is good. We need more boring.

This week we saw the release of the 2024 CPA-Zicklin Index, a collaboration between the Center for Political Accountability (CPA) and The Carol and Lawrence Zicklin Center for Business Ethics Research. The CPA-Zicklin Index has been benchmarking political spending since the Citizens United decision in 2010. The Index highlights significant improvement in in corporate political disclosure and accountability, noting:

The 2024 CPA-Zicklin Index is published shortly before Election Day and at an unparalleled time in the nation’s political history. The Index’s data reflect leading companies holding firm overall to established norms of political disclosure and accountability, despite fierce headwinds against environmental, social, and governance (ESG) and related principles for investors and U.S. corporations.

Moreover, when the 2024 Index results are compared against the last presidential election years of 2020 and 2016, the picture is striking: Many large public companies have realized major gains in disclosure and accountability for their election-related spending from corporate funds, and the gains are permanent. Whether examining the overall number of S&P 500 companies in 2024 or the 331 companies that have been a constant in the Index since 2015, the Trump years (2017 to 2021) plus Biden years (2021 to the present) have seen solid and dramatic increases in corporate political disclosure and accountability.

Some of the highlights from this year’s Index include:

– The number of all S&P 500 companies scoring 90 percent or above for political disclosure and accountability was 103, an increase over last year’s 100, and comprising more than 20 percent of all S&P 500 companies evaluated.

– 206 companies in the overall S&P 500 (over 41 percent) placed in the first Index tier (scoring from 80 percent to 100 percent). This number was more than double the 94 top-tier companies in 2016 and well beyond the 156 companies in 2020.

– The number of core S&P 500 companies scoring lowest for disclosure and accountability – in the bottom 20 percent – has declined sharply. From 106 bottom tier companies in 2016 it has declined to 73 in 2020, 37 in 2023 and 31 this year.

– For Russell 1000 companies that do not belong to the S&P 500, the average score for political disclosure and accountability is 16.5 percent. This compares to an average score of 59.9 percent for all companies in the S&P 500.

This year’s CPA-Zicklin Index certainly highlights some considerable progress in corporate political disclosure and accountability, particularly among the largest companies. Presidential election years always put a lot of focus on political spending by public companies, and having good transparency and getting the governance right can go a long way toward dispelling concerns of investors and the public.

– Dave Lynn