Environmental, Social & Governance Briefs

CPA-Zicklin Index: More S&P 500 Companies Score High in Political Transparency

October 25, 2018

While political control of Congress in 2019 is unknown two weeks before Election Day, what is known is the number of S&P 500 companies receiving high scores for political disclosure and accountability continues to increase. That is a major finding of the 2018 CPA-Zicklin Index.

The index released a month before the midterm elections marks the eighth annual non-partisan study of corporate political contribution transparency and accountability by the Center for Political Accountability (CPA) and the Zicklin Center for Business Ethics Research at The Wharton School at the University of Pennsylvania.

“Companies that spend political money in this climate are taking a risk of consumer blowback or even boycotts,” said Bruce Freed, CPA president. “The new Index shows how companies are managing the risk through a voluntary approach to corporate political disclosure, or in some instances, they’re abstaining from spending political dollars.”

Freed, a member of The Conference Board Committee on Corporate Political Spending Advisory Board, also mentioned that CPA has had contact with 88 of the 493 companies in the index, who have provided feedback and, in some cases, have offered to refine the language in their disclosure and accountability.

“The results from the latest CPA-Zicklin Index show that a substantial portion of the S&P 500 are committed to being transparent about their corporate political activities, which is terrific news for corporate leaders, investors, and anyone interested in good government,” said Wesley Bizzell, chair, The Conference Board Committee on Corporate Political Spending and managing director of political law and ethics programs for Altria Client Services LLC. “The Conference Board Committee has been a leading resource for companies that are active in the political arena, and we continue to provide useful information that helps companies understand these often-complicated issues.”

Among the findings of this year’s Index are:

• Fifty-seven S&P 500 companies received scores of 90 percent and above for political disclosure and accountability, up from 50 in 2017 and more than double the 28 companies identified in 2015.
• The average overall score for the 414 S&P 500 companies that have remained constant members since 2015 edged up to 49.7 in 2018 from 41.6 in 2015.
• The number of core S&P 500 companies – those tracked by the Index for the past four years – fully disclosing their election-related spending or prohibiting such spending increased for all five categories of political spending (political candidates, parties, and committees, 527 groups, ballot initiatives, trade associations, and 501(c)(4) “social welfare” organizations).
• The number of S&P 500 core companies with general board oversight of their political spending rose to 221 in 2017 from 182 in 2015. Over the same period, the number of companies with board committee review of political payments to trade associations and other tax-exempt organizations increased to 155 from 103.

The Conference Board committee is a group of leading American corporations dedicated to accountability, transparency, education, and engagement on issues of political activity. Over the past decade, the Committee has held several meetings and symposiums in Washington, D.C., and New York City. Also, it has issued a handbook in 2010 and reports in 2012 and 2015.