Study shows political spending, board oversight on the rise in US

This is one of those stories journalists like to call "dog bites man" – that is, it's no surprise. Such stories are rarely worth reporting. But this one is. Two think-tanks – the Investor Responsibility Research Center and the Sustainable Investment Institute – have been looking into how much money has been flowing from US corporations into the political system, and who's responsible for it. They found that the boards of 31 per cent of S&P 500 companies now explicitly oversee such spending, compared to 23 per cent in 2010. This increased oversight and transparency does not, however, translate into less spending. Companies with board oversight of political expenditures spent about 30 per cent more in 2010 than those without such explicit policies.

It's been almost two years now since the US Supreme Court ruled that companies could make unlimited campaign contributions and other donations to political parties. That made political giving an issue for board scrutiny because of its potential dimension and the resulting materiality of the cost. It also made such gifts a tool for corporate strategy.

Source document: The IRRC-Si2 report "Corporate Governance of Political Expenditures: 2011 Benchmark Report on S&P 500 Companies" is a 92-page pdf file.