Why Investors Want to Know Where Corporate Money Goes
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Episode Description
Investors are increasingly demanding transparency about how corporations spend their political money.
Witold Henisz, Vice Dean and Faculty Director of the Impact, Value, and Sustainable Business Initiative at The Wharton School, explains why corporate political contributions are becoming a growing concern for shareholders and boards. He discusses the push for greater disclosure, corporate accountability, and the financial and legal risks of political spending.
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Brief Summary
Witold Henisz explains why investors are pressing companies to disclose political contributions and how hidden spending can create financial and legal risks.
Key points
- Investors want more disclosure of political giving. Shareholders are increasingly asking corporations to disclose more of their political spending. The push is gaining support, but the speaker says investors need to go further.
- Political spending can create risk. Recommendations under the speaker’s purview frame corporate political giving as a potential source of liability and a reason for investors and boards to ask questions.
Transcript
As much as a lot of these shareholder proposals to push forward on the climate transition or push forward on human rights have gone away or gone quiet recently, the one sort of resolution we're still seeing a lot of is investors demanding that corporations disclose more of their political giving. And this is actually following the recommendations of the Zincland and Center for Corporate Political Accountabilities recommendations which sit under my purview as vice dean of Wharton impact. They've made recommendations saying look these are important sources of risk of liability and investors shareholders board should be asking the questions. We're seeing
more and more of that and they're and they're gaining support among shareholders. So there is some recognition but we need to push further and get more disclosure of more types of giving into those uh resolutions and into corporate practice.
