Pushing new political spending disclosure rules
The bruising presidential election focused attention on the massive amounts of political spending by companies, spending that companies have no obligation to disclose if the funnel the money through other organizations.
But will that change soon?
An essay by a reform proponent in DealBook notes that a movement is underway to prod the SEC to require much more disclosure.
"The SEC has broad authority to adopt new disclosure requirements, and the body of such requirements has developed considerably over time. Traditionally, the SEC has adopted new requirements when shareholder interest in certain information grew — or in light of external events that made such information more relevant for investors," it noted.
Proponents of the idea liken it to executive pay disclosure, which has been area in which the SEC has demanded tough disclosure. The SEC has fielded more than 300,000 comments on the political spending petition, and it's not a stretch to think that it will become an issue in coming years, perhaps in time for the next Presidential election.
"The SEC would thus do well to adopt rules that would shed light on political spending by public companies. Such rules are long overdue. In future elections, individuals holding shares in public companies should not be left in the dark about whether and how their money is spent on politics."
We'll likely to continue to see more shareholder proposals aimed at disclosure of such spending. Boards will be wise to think through their policies, asking the questions such as, should this information be kept from shareholders and the public, and why?
- here's the article