Corporate Political Spending and the Road to 2024

It’s one year out to the Presidential election—and it promises to be a rocky road to November. Before the crazy season engages in full, might this be the moment for corporations to take a fresh look at political spending? Two concerns loom large for corporations: one is greater expectations of full transparency from citizens, but also from employees who are becoming adept at following the money trail. The other is about alignment between values and commitments and the intentions behind the money flow.

For executives and directors with either responsibility or curiosity about what good practice looks like, I suggest digging into the work of two organizations—whose scholars and advocates pursue greater understanding and awareness of corporate political expenditures:

• The?Center for Political Accountability and its allies and partners in business, academia and investment offer?insight and guidance for companies assessing sensible practice. The affiliated Zicklin Center for Governance & Business Ethics, part of The ESG Initiative at the Wharton School , produces the?CPA-Zicklin Index of Corporate Political Disclosure and Accountability ?— which promotes clear signals to concerned investors, good governance advocates and employees working to understand the internal decision rules on spending and public accountability.?
• The University of Michigan - Erb Institute 's?Principles for Corporate Political Responsibility ?compliments the Index, and unpacks?fundamental questions about spending in the political sphere.?

One commonality between these approaches is that they're not waiting for abolition of corporate political spending to see real change. The focus is on transparency (aka “sunlight is the best disinfectant”) and values. They ask: what does it mean for corporations to spend in alignment with their values and public commitments??Increasingly, they are looking to employees as ground zero in the conversation about business norms.?

At the Aspen Institute Business & Society Program we just released?Planning for a New Reality: Agenda for the Prepared Board . Of the seven key ideas we tease out, the sixth and seventh consider corporate political spending in the context of questions like:

• “Does the board understand what trade groups do and say on behalf of the company?
• “Are industry association memberships, lobbying, and political expenditures transparent, vetted by the board, and aligned with social and environmental commitments and long-term risks?", and
• "Is political spending understood as a form of corporate voice?"

Companies like IBM and Levi Strauss are active in industry and policy circles, and yet have long refused to participate in expenditures designed to wield influence in the state house or on the Hill. In the wake of January 6th, employees began to investigate who received the corporate spend, and what they found led to dozens of companies hitting the pause button ?on political donations. Today, the spending game is again earning headlines ?and from an unlikely corner - one occupied by Senator Hawley of Missouri.

Less than a year out from the 2024 election, it is still too far out to make meaningful predictions. Might this be a moment to reconsider the wisdom of status quo expenditures—or at a minimum, real transparency? ??

Judy Samuelson is executive director of the Aspen Institute’s Business and Society Program and author of?“The Six New Rules of Business: Creating Real Value in a Changing World.”