In this presidential election year, shareholders are increasingly curious about the political agendas of public companies. Investors filed more than 100 resolutions this year asking companies to disclose what they spend on political advocacy, according to Institutional Shareholder Services, a proxy advisory service. The number of proposals for the first time exceeded shareholder resolutions on energy and environmental issues, which have long attracted significant interest from investors. Shareholders want to know about direct donations to candidates as well as harder-to-track contributions to trade associations such as the U.S. Chamber of Commerce and other tax-exempt groups that support certain candidates or political parties. Their targets include influential Illinois companies Boeing Co., Allstate Corp. and Caterpillar Inc. All three companies came out against the proposals.
The growing shareholder pressure reflects a transformed political landscape where corporate interests and anonymous donors have greater influence on elections. Companies have always been active political participants, but a landmark 2010 Supreme Court decision expanded the scope of their spending. Yet shareholders have little idea how companies are using their money in political campaigns. Only a handful of corporations voluntarily publicize their donations.
A 2010 study found that 86 percent of the Standard & Poor’s 500 companies have no disclosed policies regarding money given to trade associations or other groups not controlled by a candidate, so-called indirect political expenditures that have become highly controversial during the 2012 campaign season.