The Securities and Exchange Commission could propose rules requiring public company disclosure of spending on political activities as early as April 2013, according to the Unified Agenda of Federal Regulatory and Deregulatory Actions. The Unified Agenda is the official list of proposed regulatory activities throughout the Federal Government. The proposal listed in the Unified Agenda states only that the Division of Corporation Finance is considering whether to recommend that the SEC issue a proposed rule to require that public companies provide disclosure to shareholders regarding the use of corporate resources for political activities.
Investor activism on corporate political spending has increased significantly since the Supreme Court’s 2010 ruling in Citizens United v. FEC allowed corporations to make unlimited independent campaign expenditures for political candidates. In 2011, a group of corporate and securities professors referred to as the Committee on Disclosure of Corporate Political Spending filed a petition with the SEC in support of a rule requiring public company disclosure of political spending.
Political spending proposals offered by shareholders range from proposals that simply require disclosure to more restrictive proposals that prohibit spending (“stop spending”) or require shareholder approval of spending (“say-on-spending”). Many companies have voluntarily adopted policies requiring disclosure of political spending, including over half of the S&P 100 (although the policies vary significantly).
If the SEC does offer a proposed rule, it will likely be opposed by business trade associations that spend money to influence political campaigns, such as the U.S. Chamber of Commerce.
