Corporate Governance & Finance

Following on the 2010 US Supreme Court Citizens United decision that government cannot place limits on corporations’ spending for political purposes, ICCR and other responsible investors began drawing attention to the issue of corporate political spending and lobbying.

Between 2010 and 2016 over 700 shareholder resolutions have been filed asking for lobbying disclosure reports that include federal and state lobbying payments, payments to trade associations used for lobbying and payments to any tax-exempt organization that writes and endorses model legislation.

The proposals continue to focus on reputational risks from involvement in membership in, and donations to trade associations and organizations like the American Legislative Exchange Council (ALEC). This tax-exempt organization convenes state lawmakers and corporations to approve model legislation. Bills based on ALEC ready-made models have been introduced approximately 3,000 times since 2010, with more than 600 becoming law.

Walden Asset Management, leader of the engagement with Microsoft, commented on the Company’s exit from ALEC: Microsoft is a leader on carbon issues—in 2012, it committed to becoming carbon neutral, and is one of the largest corporate purchasers of renewable energy. Thus, we believe that its affiliation with ALEC, which is actively fighting policies that promote renewable energy, was incongruous.

Resources on Corporate Governance & Finance