Published: April 05, 2006
McDonald's, Southern Co. Adopt Political Transparency and Accountability
Growing number of major companies support board oversight and public disclosure of soft money contributions
McDonald's and Southern Co. agreed to disclose and have their directors oversee soft money political contributions made with corporate funds, shareholder activists announced today. The groups, Washington - based Center for Political Accountability (CPA), socially responsible investment firm Trillium Asset Management Corp., and the Central Laborers' Pension Fund, are part of a nationwide campaign to bring transparency and accountability to company political spending.
McDonald's and Southern Co. join Morgan Stanley, Johnson & Johnson, Schering-Plough, Pepsico, Coca Cola, Eli Lilly, Bristol- Myers Squibb and Staples which adopted political transparency and accountability policies over the past 16 months. Under the policies, all soft money political contributions will be reviewed at the Board level on an annual basis. In addition, each company will post a complete list of corporate political contributions on its website and disclose the guidelines for their political giving.
"Companies are recognizing the common sense proposition that political disclosure and accountability can only help them and are what shareholders overwhelmingly want," said CPA Co-Director Bruce F. Freed. "McDonald's and Southern Co. are to be congratulated for making these reforms part of good corporate governance."
Current campaign finance law allows corporations to make donations in many states and to political committees commonly known as 527s, but not to federal candidates. However, companies aren't required to disclose political contributions made with corporate funds, leaving institutional investors and individual shareholders in the dark about the use of company resources for political activities.
McDonald's, the global foodservice retailer, and Southern Co., a major utility, adopted these policies following discussions with the Central Laborers Pension Fund and Trillium Asset Management respectively.
"The additional steps that Southern has agreed to take are all the more significant because a change in federal law now allows public utilities' subsidiaries to make contributions to candidates in state and local races," said Shelley Alpern, vice president and director of social research and advocacy at Trillium Asset Management. "We'd prefer tighter restrictions on candidate donations, but at least these will be transparent."
Edward Smith, chairman of the Central Laborers' Pension Fund, said, "As shareholders of McDonald's, we support policies and practices that bring transparency to corporate balance sheets. We are pleased that the board has taken a step closer towards providing shareholders with a better sense of the political spending at the company."
For the past three years, the CPA, a non-partisan, non-profit advocacy group, has been leading a shareholder campaign that includes 18 institutional investors and allied groups to get companies to agree to political disclosure and accountability. For the 2006 proxy season, CPA-model resolutions will be voted on by more than 40 companies.
In the 2004 election cycle, companies contributed more than $75 million in soft money at the federal level. According to the CPA, some of the contributions have gone to political activities that conflict with a company's publicly stated policies and practices or are unrelated to its core business.
The Center for Political Accountability is a non-profit, non-partisan advocacy group whose mission is to bring transparency and accountability to corporate political spending.
Website: www.politicalaccountability.net
Trillium Asset Management Corp. manages over $1 billion in assets for institutional and individual investors. For over twenty years, Trillium has been the leader in socially responsible investing.
Website: www.trilliuminvest.com
The Central Laborers' Fund provides benefits for approximately 14,000 active and inactive vested union laborers of the Laborers International Union of North America.
Website: www.central-laborers.com
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