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DonateCompanies are facing ever-greater scrutiny of their political activities, with some of the US' biggest businesses still grappling with a response to January’s Capitol riot. As companies reevaluate their role in the political sphere, a new report by The Conference Board highlights considerations and best practices regarding corporate political activity.
EXECUTIVE SUMMARY
On January 4, 2021, the US business community did something remarkable. Through statements issued or organized by Partnership for New York City, Business Roundtable, US Chamber of Commerce, and National Association of Manufacturers, business leaders called on Congress to accept the results of the Electoral College in the 2020 presidential election without delay.
Then, in the wake of the January 6 attack on the US Capitol—and the objections by certain members of the House and Senate to the certification of the electoral votes—many major US companies announced that their employee-funded political action committees (“PACs”) were stopping their contributions to the objectors or, more broadly, to federal lawmakers.1
These are only the latest examples of corporations (and their PACs) acting in the political sphere. Of course, companies have long been engaged in politics—making political contributions, lobbying policymakers, funding ballot initiatives, and taking public stands on policy issues.
But things are different today. In this era of intense political polarization in the United States, and with the immediacy, ubiquity, and (often) inaccuracy of social media, companies are subject to ever-greater scrutiny for their political activities. The combination of polarization and scrutiny is enough to make some companies choose to limit, or avoid engaging in, political activity, including spending.2 Others have focused on get-out-the-vote efforts that are presented as nonpartisan, good citizenship efforts that can find support across the political spectrum.3 But banning, or severely limiting, a company’s political activities to just those focused on areas like voter registration isn’t a realistic option for many firms.
In the wake of the 2020 US election, The Conference Board ESG Center held a roundtable to discuss the current regulatory environment for corporate political activity, the prospects for shareholder proposals on the topic, and best practices in addressing this era of scrutiny and polarization. Following the events of January 6, the ESG Center also conducted a survey of 84 large public and private firms on how companies and their employee-funded PACs are responding to the Capitol riot and objections to the election certification. The discussion and survey generated the following insights for what’s ahead on corporate political activity:
[1] Alex Gangitano, “Here Are the Companies Suspending Political Contributions following the Capitol Riots,” The Hill, January 12, 2021.
[2] Rachel Sandler, “Twitter Shuts Down PAC, Donates Remaining Money to Charities,” Forbes, October 22, 2020; Apple’s Public Policy Advocacy Statement.
[3] Amanda Mull, “Why Is Uber Begging Me to Vote?” The Atlantic, September 29, 2020.
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