An excellent essay on the importance of transparency in corporate political contributions from the perspective of shareholders, by Lauren Compere of sustianability investor Boston Common Asset Management:
When companies do their political lobbying behind closed doors it threatens both our democracy and ultimately the credibility and trust in a company’s own brand.A key part of an investor’s job is to know and understand risk. However in the U.S., as well as many other countries, there are no regulations requiring companies to publicly detail whether they have made direct payments to political parties, candidates, trade associations, special interest groups or lobbyists. This creates a lack of transparency, and increases the risk of corruption.A lack of transparency also means that companies often don’t know what trade associations are doing on behalf of their members. Ford Motor Company is just the latest to join over 100 companies (including iconic brands Microsoft, PepsiCo, Mars, Wal-Mart, and Unilever), which have left the American Legislative Exchange Council (ALEC) which is involved in drafting model state legislation on gun control, Voter ID laws, Stand Your Ground laws, anti-immigration bills, blocking EPA regulations, and reversing state regulations on renewable energy. Similarly, a number of US companies have left the Chamber of Commerce which has spent over $1bn on lobbying since 1998. While new research from InfluenceMap indicates that major oil companies and their trade associations spent over $100m in 2015 on efforts to obstruct and delay climate policy.Simply put, we believe it is in the best interests of shareholders for companies to be transparent and accountable about whether they use corporate funds to influence regulation – both directly and indirectly.