With nine months remaining before the U.S. presidential elections, some investors have expressed themselves politically via an earlier set of votes: Nearly one-third of shareholder resolutions filed for the upcoming annual-meeting season ask companies to reveal more about their campaign spending and lobbying, according to a report released today.

If they don’t persuade companies to meet their requests, those shareholders still have a prominent regulator on their side. Last Friday SEC commissioner Luis Aguilar said the Securities and Exchange Commission should require companies to disclose their political outlays. “It is the commission’s responsibility to . . . ensure that investors are not left in the dark when their money is used without their knowledge or consent,” he said during an event held by the Practising Law Institute.

Aguilar said shareholders are missing out on information that would help them make informed investment decisions. And he suggested the SEC put an end to the continual debate over whether companies should be more forthcoming when they designate money toward helping a particular candidate or cause by coming up with new guidance. “The commission should act swiftly to rectify the situation by requiring transparency,” he said.

The SEC has recently received requests to create a disclosure framework from various constituents, including businesses, state treasurers, and academics. Last August, for example, 10 law professors wrote such a petition to the regulator that has since been signed by thousands of people.

Some states do require certain disclosures from companies that lend financial support to state and local measures. But there is no federal mandate for such information.

To be sure, larger companies have become more transparent about their practices in recent years. Just over half of S&P 100 companies share information about their political spending on their website, according to the Center for Political Accountability.

“A lot of companies are stepping up and doing more disclosure, and in fact haven’t expanded their political spending since Citizens United,” says Tim Smith, a senior vice president at Walden Asset Management, which has filed 40 resolutions at companies asking for reports about lobbying spending.

Part of the reason for the increased transparency, ironically, may come from Citizens United v. Federal Election Commission, the 2010 Supreme Court ruling that freed up companies’ ability to financially support political campaigns. (Companies are still forbidden from giving money directly to politicians; instead, they must contribute through political action committees.)

President Obama spoke out against the Citizens United decision, contending it enables companies to spend unlimited amounts of money to influence elections and, indirectly, the decisions government makes.

The ruling was followed by legislation that would require companies to let shareholders approve political-campaign spending and expand related disclosures in regulatory filings. Such bills have thus far failed, leaving shareholders to try to exert influence on companies to enact changes.

This year companies have seen at least 109 resolutions on the topic of political-spending disclosure, according to As You Sow, a nonprofit advocate for what it sees as corporate responsibility that issued the shareholder survey on Tuesday. That’s double the amount of such shareholder resolutions filed three years ago. Some of the proposals will be doubtless withdrawn if companies agree to do these disclosures on their own.

Some investors are also taking the debate a step further by asking companies to stop contributing to campaigns altogether (3M, Target, and Bank of America have received such requests) and to give shareholders the ability to vote on companies’ policies for political spending (such proposals have been submitted to Chubb, Google, and Home Depot).


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