Now that the Supremes have said the corporations can run wild with political spending, what’s our next move? Back in November, the Brennan Center’s Ciara Torres-Spelliscy made an interesting suggestion in Business Week — do what the Brits do and put more power into shareholders’ hands:
A law passed in 2000 requires British companies to get shareholders’ permission to make political expenditures and must report the spending in their annual reports.Here’s how it works: Corporations annually disclose every political expenditure of at least $3,000, naming the recipients. They must obtain prior shareholder approval, usually at the annual meeting, to spend more than $8,000 on political campaigns in the following year or so (no recipient names required). If the resolution fails, no dice. Any directors who make unapproved corporate donations are personally liable for the amount spent.
The official rationale behind it can be pretty conservative:
Shareholders need to be protected because they don’t necessarily profit from a corporation’s political donations. Indeed, a recent study of more than 12,000 companies, led by University of Minnesota professors Rajesh Aggarwal, Felix Meschke, and Tracy Wang, found that corporate political expenditures were typically linked with lower shareholder value. The survey suggested that donations were based in part on managers’ political preferences, not on what might benefit their businesses.
What I like about this approach is that it moves our play to a board where we’ve got more leverage.
Although the new rules are worse, under the old rules corporations could easily buy a Super-sized order of political influence. Every few years a group of reformers would try to “take the money out of politics.” And every time, corporations figured a way around the new reforms. Big surprise there — changing the rules of the game pays off big time, so they’d be idiots not to.
Rather than keep playing a game where the odds are stacked completely against us, I’d rather put the same energy into putting more power into shareholders’ hands and then taking advantage of it. It puts corporate bigwigs on the rhetorical defensive — if shareholders “own” the company, why shouldn’t they have a say? And unions and other activists have already been able to get a fair amount of influence out of the extremely limited shareholder power we have right now. Why not see what we can do if we can crank the dial up a little?
