March 10, 2010
Righting a Wrong – Let Shareholders, Not CEOs, Decide How Corporate Money Is Spent on Politics
Statement of Craig Holman, Government Affairs Lobbyist, Public Citizen
Irresponsible corporate governance has become a plague on the U.S. economy and soon will become a plague on our political system as well. In Citizens United v. Federal Election Commission, the U.S. Supreme Court unleashed unlimited corporate spending in elections, but made no effort to ensure that those who own companies – their shareholders – have any say over these corporate political expenditures.
Rep. Michael Capuano (D-Mass.) has reintroduced the “Shareholder Protection Act,” a helpful legislative effort to make CEOs accountable to shareholders when they want to spend shareholders’ money on politics.
This legislation would require CEOs to secure shareholder approval of corporate political budgets annually and board of directors approval of individual political expenditures. It also would require that both shareholders and the public be fully informed as to how much the corporation is spending on politics. These disclosures must also be published on the Internet. The bill would be made stronger if institutional shareholders could not vote on behalf of members or beneficiaries without their consent, and if shareholder votes on every political expenditure were required.
Corporate treasuries should not be playgrounds for CEOs. Responsible corporate governance requires informed shareholders, capable of holding management accountable and ensuring that spending decisions are made in the best interests of the business.
The bill is scheduled for a hearing on Thursday before a subcommittee of the House Financial Services Committee. It deserves our support.