March 2017

Corporate Governance Quarterly Update
Since the U.S. Supreme Court’s 2010 decision in Citizens United, which effectively invalidated restrictions on certain corporate political contributions, various shareholder activists and corporate governance advocates have increasingly sought corporate disclosure of such contributions. Shareholder proposals seeking greater transparency of corporate political spending, for example, have generally increased in both number and investor support since Citizens United. Moreover, subsequent to Citizens United, neither the U.S. Congress nor the Securities and Exchange Commission has taken any formal action to ensure that shareholders (as ultimate owners of publicly held companies) are informed of how their corporate assets are being spent on political activity despite the significant increase in investors’ and governance advocates’ calls for corporate political contributions disclosure. Many companies, however, are voluntarily making these types of disclosures and such undertaking is evolving into a best corporate governance disclosure practice.

This corporate governance update (1) provides general background information regarding corporate political contributions and related disclosure, including corresponding 2016 and 2017 proxy season activity, (2) summarizes the current corporate political contributions policies and positions of several large asset managers and pension funds, leading proxy advisory firms and certain corporate governance advocates, to provide insight into the expectations of these entities with respect to such contributions and related disclosure, and (3) presents practical considerations for board members to help facilitate discussion as to whether their company’s current political contributions and related disclosure policy, if any, satisfies the needs of the company and its shareholders and other stakeholders.

This Corporate Governance Quarterly Update was republished by Law360 on April 5, 2017.

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