Trillium Responds to Wall Street Journal Editorial Regarding Corporate Political Spending Disclosure
An abridged version of Trillium’s response, along with a letter from the Center for Political Accountability, was posted to the Wall Street Journal website, yesterday.
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In the wake of the U.S. Supreme Court decision in Citizens United there has been increasing concern about corporate dollars flowing into political races via trade associations and other tax exempt organizations.
Trillium Asset Management supports transparency and accountability in corporate spending on political activities. We believe that disclosure is in the best interest of companies, their shareholders, our democracy and our economy. Our firm engages companies on these issues on behalf of our clients because we take shareholder ownership as a serious responsibility, including the opportunity to share sound governance practices with the companies in our clients’ portfolios.
On May 23, 2014, the Wall Street Journal published an editorial entitled “Good News in the Proxy Wars” in which the editorial board specifically criticizes Trillium while it also tries to make a case against corporate disclosure of political spending. They maintain that there is “no fiduciary reason that companies should have to disclose in a proxy how much they give to groups like the Chamber of Commerce, the Business Roundtable or to political campaigns.”
The editorial board ignores the fact that, in many cases, overwhelming numbers of shareholders support political contribution disclosures.
For instance, in 2013 Trillium submitted a shareholder proposal at Hess Corporation (NYSE: HES) asking the company to disclose policies and procedures for making political contributions and expenditures as well as monetary and non-monetary political contributions or expenditures that could not be deducted as “ordinary and necessary” business expenses. Not only did the proposal receive a 46% vote, but Hess management was only able to secure 47% of shares for its anti-transparency position.
This spring, the company took its shareholder concerns seriously, and followed in the footsteps of over a hundred companies by deciding to issue meaningful disclosures.
We believe that Hess reached this decision because disclosure is now seen as good corporate governance by so many of its shareholders. It is a prudent, cost effective and responsible way to minimize unnecessary risks and to maintain sound discipline and controls on spending decisions.
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