The Supreme Court's Citizens United case, which helped further open the floodgates for corporate political spending in America, is about an ongoing and extremely contentious issue. Even before the ruling, there was plenty of reason to believe the deep-pocketed "corporate people" had far more influence on politics than regular people, and it was a bit amazing to think that corporate interests were given the go-ahead to exert even more power over political outcomes.
In California, lawmakers recently put forth a resolution to overturn the unpopular decision, further asking Congress for a constitutional amendment to that end. Obviously, many regular people simply can't accept the "corporate personhood" argument. The fact that corporate money is equated with "free speech" for these inhuman entities is pretty hard to swallow, too.
The criticism is leveled at corporations from many quarters, including some of their shareholders. All investors should keep track of the resolutions that are being lodged at public companies, and be aware of which ones are willing to voluntarily practice full disclosure of their political spending (or even ban such spending altogether).
Embracing disclosure
Some corporations are coming around to the idea that honesty is the right policy in this area. Of course, they've probably gotten a little nudge in that direction in the form of shareholder resolutions demanding transparent policies about political spending.
In late March, the Center for Political Accountability reported that 100 corporations have adopted disclosure and oversight of their political spending.
These aren't minor operations that hardly ever show up on investors' radars, either. Halliburton
Financial giant Goldman Sachs
Occupy proxy ballots
These "corporate people" likely recognized the writing on the wall. In last year's proxy season, the average shareholder vote supporting political spending disclosure and accountability rose to a record 33%.
Some companies' votes were compellingly high, such as the 46.5% of Halliburton shareholders who voted for such proposals. Nearly half of R.R. Donnelley & Sons
Many big investors have been working with companies to make this change. For example, the New York State Comptroller's Office took on CSX, R.R. Donnelley, and Safeway; Trillium Asset Management targeted Halliburton.
Even beyond such specific targeting, corporate managements and boards have good reason to believe this year's proxy season likely will yield even higher numbers of shareholder votes in favor of controlling political influence or, at the very least, being upfront about it. Now that the Citizens United case is returning to the forefront of public attention, the situation's even more urgent and timely.
The corporate megaphone outshouts us all
It's good news that many of the biggest companies are getting the message that, at the very least, shareholders are entitled to know how their money is spent in the political realm. The issue looms large this year more than ever.
Perhaps companies that wish to keep too many secrets and obscure incendiary elements of their expenditures should never have gone public in the first place. Furthermore, big money interests that attempt to distort the marketplace for their own benefit should never have been freed to exert even more undue influence over politics.
Shouldn't the strongest companies compete on their own merits and plow their resources into growth initiatives anyway? Political expenditures are a misuse of shareholder capital, and another distraction from true business excellence. Free speech for individuals is one thing, but corporations' big money talks too loud for the marketplace to function well. The volume on the corporate megaphone needs to be cranked way down.
Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on environmental, social, and governance issues.
