Spotlight on CPA - November 2019
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CPA’s Financial Times Op-ed Takes Lead in Calling Out SEC Attack on Corporate Democracy
CPA is in the forefront of efforts to defeat a U.S. Securities and Exchange Commission proposal that would shred corporate democracy as we know it. CPA kicked off its opposition in an op-ed published by one of the world’s premier publications on business and the economy, the Financial Times.

“American companies are under pressure to be more responsive to their workers, communities and the environment. But US business groups and regulators are trying to gut one of the main tools that shareholders have used to hold them accountable on issues including climate change, pay, diversity, political spending and gun control,” CPA President Bruce Freed wrote. He was joined by Eleanor Bloxham, founder of the Value Alliance and the Corporate Governance Alliance.

Radical rule changes by a majority of SEC commissioners on Nov. 5 would “make it much harder to use the proxy process to call for investor votes on specific issues,” CPA wrote. “The rule changes would disproportionately hit small investors and their ability to wage multiyear campaigns for improved disclosure and policy changes.”

The rules would raise ownership thresholds for filing a shareholder proposal; bar share aggregation; set new thresholds for resubmission of a proposal; and impact proxy advisors. You can read a concise summary here compiled by US SIF, the Forum for Sustainable and Responsible Investment.

“If they are approved without changes, investors will be deprived of an effective voice. That would not only strip them of an important shareholder right, but also throttle the future of capitalism. If shareholders cannot effect change, public pressure for costly new regulation of business will rise. Undermining the proxy process would also remove an important non-legislative avenue for starting to address some of society’s most vexing issues,” the op-ed said. It was titled, “Do not stifle shareholder voices.”

Freed also cited the success of CPA’s efforts using the shareholder proposal process. “Our campaign to push companies to disclose the hundreds of millions of dollars they spend to influence elections has made big inroads since it started in 2003. Thanks in part to the proxy proposal process, these disclosures are becoming a corporate governance norm and are a positive example of campaign finance reform achieved through private, not public, channels.” (For more, see Founder’s Column.)

SEC Commissioners voted 3-2 to propose the rule changes. Commissioner Robert Jackson Jr., dissenting, said the “proposal simply shields CEOs from accountability to investors. Whatever problems plague corporate America today, too much accountability is not one of them.”

The SEC vote has sparked a lot of controversy. CPA, its shareholder partners and other activist investors are drafting public comments to submit to the commission. There is extensive press coverage about the SEC plan, including a recent Bloomberg article that was headlined, “SEC Chairman Cites Fishy Letters in Support of Policy Change.”

Newark Star-Ledger Editorial, Numerous Companies Cite Index as Wide Coverage Continues 
The 2019 CPA-Zicklin Index of Political Disclosure and Accountability, released in October, continued to capture widespread media and online coverage targeting select audiences in November. 
  • A lengthy editorial in the Newark (N.J.) Star-Ledger advocated corporate political transparency and cited both the latest Index and CPA’s 2018 “Collision Course” report in doing so. “If you buy toys from Mattel, fly Delta, use TripAdvisor, Twitter or wear Hanes undies, you have no idea whose [political] interests you’re helping to bankroll. These companies are among the least transparent in America about their political spending, CPA found,” the editorial said.
  • Roll Call, a Capitol Hill publication with a focus on legislation and governing, zeroed in on ways that disclosure data in the Index could provide a template for the drafting of legislation in Congress. See  “More companies publicly disclosing what they spend on politics, study finds.”
  • Fulcrum is a foundation-funded nonprofit, nonpartisan publication. It wrote, “An increasing number of the country's largest publicly traded companies are disclosing more than ever about political spending habits that the law permits them to keep secret. That's the central finding of the … report from a group of academics and corporate ethicists, who say the average score among the biggest companies traded on American exchanges, the S&P 500, has gone up each year since 2014.”
  • Attorneys from the prominent WilmerHale law firm wrote glowingly at JDSupra  about the Index and CPA, and added: “The report is an important reminder for boards, management and in-house lawyers that, especially in the current contentious climate, corporate political activity continues to be a significant public focus and that they should proactively manage their oversight and disclosures lest investors or the media do it for them.”
  • Companies touted their high scores from the 2019 Index. BD used its performance as a tool in recruiting job applicants who are women. Ventas meanwhile, promoted the Index results as showing it to be the “Highest Performing Healthcare REIT for Corporate Political Disclosure.”

Leading Business Group Hails CPA-Zicklin Index as Good Governance Measure
How do corporate political disclosure and accountability fit into a global push for sustainability? John Hodges, Managing Director of BSR (also known as Business for Social Responsibility, a global nonprofit organization) tackled this topic in BSR’s blog. We are grateful for his shout-out to CPA.

“A large concern for an organization such as BSR, as well as many other stakeholders, is that while corporations develop sustainability strategies on environmental and social issues, subsequent political activity is not aligned with those sustainability positions,” Hodges wrote.

“This leads to the question: What can corporations do to demonstrate alignment between their political activity and corporate sustainability strategies and goals? We recommend the following three good practice approaches.” Hodges began with transparency and continued:

“Although there are some legally required disclosures for corporations on their political activity, good practice – and what is increasingly expected by stakeholders – is that corporations go further. The annual CPA-Zicklin Index of Corporate Political Disclosure and Accountability CPA-Zicklin Index of Corporate Political Disclosure and Accountability . . . is a well-respected and publicly available resource for companies to gauge how well they are disclosing their political activities against 24 scoring criteria.

“A positive takeaway is that the Index shows there has been a ‘trend toward enhanced accountability, transparency, compliance, and oversight across all corporate sectors’ since Citizens United. I recently spent a day with CPA-Zicklin team, as well as many leading experts on this topic, and the key takeaway from the discussion was that transparency alone is not enough – the intent of the political activity and public positions on issues are what is really important.”

Hodges also discussed principles-based alignment and the value of review for alignment on payments to political or industry associations.


SEC Commissioner Rob Jackson Castigates BlackRock, Vanguard, Fidelity for Opposing Corporate Political Disclosure
Securities and Exchange Commissioner Robert Jackson Jr. recently criticized large institutional investors BlackRock, Vanguard and Fidelity for “failing to push corporations to disclose their campaign contributions,” according to a Bloomberg article.

These investors are voting “to keep corporate political spending in the dark,” Jackson wrote in a Nov. 18 letter to Representative Carolyn Maloney, a New York Democrat. “For the largest institutions, there is virtually no variance by company or over time.” Jackson is an independent. Read Jackson’s letter by clicking here [embed link]. The Street also reported on Jackson’s letter.

There’s no end in sight to the gushers of dark money flooding Washington. Here’s the latest from Politico: “The Sixteen Thirty Fund, a little-known nonprofit headquartered in Washington, spent $141 million on more than 100 left-leaning causes during the midterm election year, according to a new tax filing  from the group. The money contributed to efforts ranging from fighting Supreme Court Justice Brett Kavanaugh and other Trump judicial nominees to boosting ballot measures raising the minimum wage and changing laws on voting and redistricting in numerous states.”


Call for Action: Tell the SEC to Stop Its Assault on Shareholder Engagement

Founder's Column
By Bruce Freed

If you care about bringing daylight to political dark money, then it’s urgent that you speak out against a disastrous proposal from the U.S. Securities and Exchange Commission and its large trade group allies.

But don’t take it from CPA. Instead, listen to a campaign finance expert and fellow at the Brennan Center, Ciara Torres-Spelliscy, a professor of law at the Stetson University College of Law. Here’s what she writes about dark money, CPA, and the SEC proposal:
Because of . . . shareholder efforts on dark money, led by the advocates at the Center for Political Accountability, over half of the S&P 500 companies have become more transparent about their political spending, . . . 
Another factor in their success has been proxy advisors — firms that suggest how institutional investors should vote on shareholder proposals — who have also embraced ending corporate dark money.
But all of that progress could come to a screeching halt if the Trump administration’s proposed rule change is adopted, because it would make it much harder for retail investors to make shareholder proposals.

In a nutshell, CPA and its shareholder partners are successfully making political disclosure and accountability a norm in corporate America thanks to this avenue, established more than 70 years ago, for shareholders seeking to hold companies accountable.

Yet the new SEC proposals would bring our remarkable progress, in Torres-Spelliscy’s words, to a “screeching halt.”

It has taken a long time – years – for all of us to make our issues understood and begin winning acceptance. With understanding, proxy advisors have weighed in and helped bring sunlight to company political spending.

They’ve provided in-depth, reasoned analysis of shareholder resolutions, at costs that otherwise would have to be incurred by investor groups. They’ve allowed broad swaths of investors to take advantage of their analyses.

When Justice Anthony Kennedy wrote the Supreme Court’s Citizens United opinion in 2010, he underscored the protections afforded shareholders “through the procedures of corporate democracy.” And disclosure, he wrote, “permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

As we approach the 10-year anniversary of Citizens United, how ironic if the SEC were to undercut these “procedures of corporate democracy” and at the same time dismantle a long-term, successful shareholder campaign for corporate political disclosure and accountability. 

And how tragic, given the gains we have achieved.

The SEC is receiving public comment. Please let the SEC know your concerns and opinions. Read a summary of the proposed rules here. Write your opinion about the shareholder resolution rule and send to including File Number S7-23-19 in the subject line. Write your opinion about the proxy advisor rule and send it to including File Number S7-22-19 in the subject line. (To learn about CPA’ op-ed in the Financial Times on the SEC proposal, see first article in this newsletter.)


CPA in the News
MapLight published an article headlined, “Facebook, Google, and Amazon Pour Money Into Policy Shops as Breakup Debates Rage.” CPA’s Freed told MapLight, “These companies now are running into the same problem that companies face with their political spending -- their giving needs to be in line with their core values and positions.”

Freed Meets Business Leaders
CPA recently met with Leadership Greater Chicago, a group of business and non-profit group leaders from the greater Chicago region who were visiting Washington. It was part of CPA’s work to inform and educate influential audiences about corporate political transparency and accountability. Data Update Imminent

CPA's comprehensive database on corporate political spending,, will be updated this month to include all voluntarily disclosed political contributions from S&P 500 companies in 2018. Currently the data includes all such contributions from 2015-2017. When it was released in 2017, the database for the first time shined a light on over $100 million in previously hidden money given by companies to trade associations and “social welfare” organizations, also known as 501(c)(4)s.

CPA will send an alert as soon as the updated data is available.
CPA is a non-profit, non-partisan organization created in November 2003 to bring transparency and accountability to political spending. To learn more about the Center for Political Accountability visit
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