Fearful of facing public wrath in a heated political environment, a record number of US companies have adopted stronger transparency and accountability practices over their political spending, according to a new report.
Protests and boycotts, like the recent campaigns against AT&T, Equinox and SoulCycle over their support or association with Donald Trump, have pushed more companies to “embrace sunlight”, according to the CPA–Zicklin Index, a non-partisan scorecard released by the Center for Political Accountability (CPA) and the Zicklin Center at the University of Pennsylvania’s Wharton School.
The 2019 report registers the largest year-to-year increase in the number of companies on the S&P 500 index scoring the highest possible grades for disclosure and oversight of their election-related spending.
The index, which is published annually, takes into account soft money contributions and payments to trade associations and other tax-exempt organizations used for political purposes.
“Increased scrutiny has forced companies toward greater disclosure and to take stands on contentious policy issues,” Freed said. “Social media and millennials have really raised the stakes for companies, and we’re seeing that in the type of policies companies are adopting.”
According to the index, the number of top-scoring companies in terms of disclosure is 73, up from 57 last year. Sixty companies had substantive conversations with CPA about adopting or strengthening political disclosure and accountability policies.
The index also found a high correlation between companies embracing transparency around their political spending, or adopting prohibitions on political spending, and shareholder activism in favor of motions proposing clear political donations disclosure policies.