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Proxies to be political in 2012

By Sheyna Steiner · Bankrate.com
Thursday, March 1, 2012
Posted: 4 pm ET

Every year, companies hold shareholder meetings at which the state of the company is discussed, and votes are held on any proposed changes to the way the company does business -- including environmental, social and governance issues.

For shareholders who can't make it to the meeting, there is proxy voting. Well ahead of the meeting, companies send out financial information and proxy ballots, so far-flung stock owners can vote their proxies and help to influence the direction of the business.

As You Sow, an organization that promotes shareholder advocacy, released a report on Tuesday called Proxy Preview 2012, which covers all the shareholder resolutions filed this year on social, environmental and governance issues.

According to the report, one of the hottest topics for shareholders this year is political spending.

The headline issue for the 2012 proxy season is political spending, not just in elections as has been the primary focus until this year, but also after elections in terms of lobbying -- speaking to the allegations of undue corporate influence on politics and the economy raised by the Occupy Wall Street movement. Companies are providing more oversight and disclosure of their political spending, but the investor appetite for more is huge, evidenced by high votes and the sheer number of proposals. There are 47 resolutions from the Center for Political Accountability on campaign spending and another 40 about lobbying -- the big new push this year that is coordinated by Walden Asset Management and the American Federation of State, County and Municipal Employees, or AFSCME. Trillium Asset Management and Green Century Capital Management are proposing the all-out strategy of eschewing campaign spending altogether at three companies, while NorthStar Asset Management has expanded its request for advisory votes on political spending going to seven companies.

In 2010, the Supreme Court ruled on the controversial case Citizens United v. Federal Communications Commission,  which opened the door for unlimited corporate spending on political campaigns. But there's no requirement for publicly held companies to disclose campaign contributions or lobbying efforts.

The report from As You Sow states that while direct spending by corporations or unions can be found in public records, donations to third-party groups, such as trade associations and nonprofit social welfare groups, do not have to be disclosed, and those groups have no obligation to reveal the source of the funds.

Do you vote your proxy ballots? Would you, hypothetically, vote for a shareholder resolution urging more transparency or complete abstention from political donations?

My sense is we've all known all along that business and politics go together like PB and J, but the new regulatory reality is a bit too cozy for many. Thoughts?

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