Washington, DC – For the sake of a functioning and accountable corporate democracy, the U.S. Securities and Exchange Commission (SEC) should require disclosure of corporate political spending, 57 organizations and investors said in a letter (PDF) today. The groups ranged from environmental groups to asset managers to religious organizations.
“The resources of the Securities and Exchange Commission (SEC) are required to write numerous rules, police the markets, and react to changes in company structure,” the letter stated. “To enact its mandate to protect investors, theSEC needs to require material disclosures of critical business information for investors, and this includes being able to react quickly to the changing practices and priorities of corporate entities.”
The increased amount of spending in politics by corporate entities has come in the wake of the U.S. Supreme Court’s 2010 Citizens United decision. A petition to the SEC for rulemaking on disclosure of this spending has received more than 1.2 million comments in support – a record for that agency.
“Without adequate disclosure of corporate political spending, shareholders and investors have little means to hold corporate directors accountable and to safeguard their investments,” the letter says. “And investors understand this; a recent survey of members of the CFA Institute, an association of professional investors, found that 60% of members believe that if corporations are able to spend money in elections, they should be required to disclose the spending.
“Without an SECrulerequiring full disclosure for all public companies, shareholders have no uniform means to monitor these activities, or assess the risks of corporate political spending. Voluntary disclosure has led to a patchwork of understanding which makes it impossible for investors to manage, and potentially mitigate, the full range of risks presented by corporate political spending.”
The Corporate Reform Coalition maintains that the SEC must obey its mandate to protect investors and heed this request for action.