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Volume XIII, Number 86


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Is Corporate Political Disclosure Leveling Off? Crunching the latest CPA-Zicklin Numbers

For years, the Center for Political Accountability’s annual CPA-Zicklin Index of corporate political practices has touted marked year-over-year increases in corporate political disclosure practices.  Look at the subtitles for its recent reports: How Leading Companies are Strengthening Their Political Spending Practices (2013), How Leading Companies are Making Political Disclosure a Mainstream Practice (2014 and 2015), S&P 500 Review Shows Political Disclosure and Oversight Becoming Common Practices.  But new data published this week signals that momentum for voluntary corporate political disclosure has slowed slightly.

The non-profit Center for Political Accountability and the Zicklin School at Wharton annually rank all companies in the S&P 500 on political disclosure and oversight practices.  Companies receive “points” based on the type of political spending and oversight information they voluntarily report on their website; the more points, the better the ranking.  In its most recent report (subtitle: Sustained Growth Among S&P 500 Companies Signals Commitment to Political Disclosure and Accountability), the number of companies disclosing information about their political spending declined slightly for the first time.  A few data points:

  • The number of companies in the S&P 500 disclosing at least some election-related spending or prohibiting such spending altogether decreased from 305 in the 2016 report to 295 in 2017 report.

  • The number of companies disclosing at least some information about payments to trade associations, or instructing trade associations not to use their payments for election-related activity fell from 45 percent in the 2016 report to 41 percent in the 2017 report.

  • The number of companies disclosing at least some information about payments to 501(c)(4) social welfare organizations or restricting such payments altogether ticked down from 31 percent to 30 percent.

  • The average total score increased less than one percentage point (from 42.3 percent in 2016 to 43.1 percent in 2017), compared to a 2.5 percent increase between 2015 and 2016.

These numbers all suggest that average corporate political disclosure practices are beginning to level off.

Still, companies should be cautious about reading too much into these reduced figures. Some of the score changes can be explained by year-over-year changes to the composition of the S&P 500.  As companies with disclosure policies have fallen out of the S&P 500, new companies without these policies have joined the list.  Indeed, the average disclosure scores for those companies who were in the S&P 500 in each of the last three years continued to steadily increase.

Moreover, even if some disclosure scores are sliding, the Index continues to pressure low performers, calling out so-called “basement dwellers.”  The latest report, for example states, “Today, 59 companies in the S&P 500 reside solidly in the basement. They lag behind in taking reasonable, easily manageable steps to safeguard themselves and shareholders against the risks posed by corporate spending on politics.” We expect that some of these companies, in the coming year, will face pressure from shareholders, activists groups, and the press to take steps to increase their scores.

© 2023 Covington & Burling LLPNational Law Review, Volume VII, Number 270

About this Author

Zachary Parks, Election, Political Law Attorney, Covington Burling, Law firm
Special Counsel

Zachary Parks advises corporations, trade associations, campaigns, political parties, and high-net worth individuals on their most important and challenging election and political law problems. 

At the federal level, Mr. Parks' expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules.  He has also helped clients comply with the election and political laws of all 50 states.