Political Money: The Need for Director Oversight

Companies have traditionally paid little attention to their political expenditures, which has led to serious legal and reputation risks, some of which have been costly. Corruption investigations, shareholder concerns, questions regarding the benefits of company political donations, and proxy pressures have prompted business to adopt new policies requiring greater transparency and accountability in their political spending. Political disclosure is becoming a core corporate governance standard and is appearing on company agendas. Directors recognize that political spending carries real risks, but such risks can be mitigated by disclosure and oversight of a company’s political spending.