In its January ruling in Citizens United v. the Federal Election Commission, the Supreme Court allowed corporations, and, by extension, unions and advocacy groups, to tap their treasuries to support or attack candidates for federal office – although they still can't directly contribute to these candidates. "We're horrified. It was a dreadful ruling that has all kinds of pernicious implications," says Ms. Berry.
So shareholders are fighting back. For example:
•In late February, the Center for Political Accountability (CPA) and the Council of Institutional Investors jointly sent letters to 427 of the companies in the S&P 500 stock index, asking them to disclose all their political contributions. The letters, signed by 44 other groups, also asked corporate boards to approve and review all company political outlays. As of now, 73 companies in the S&P 500, including almost half of those in the S&P 100 index, disclose their political spending, says Bruce Freed, the CPA's president.
•The Investor as Owner subcommittee of the Securities and Exchange Commission is taking up the issue of political contributions. "We will be [exploring] whether investors have a consensus view [on] what, if any, steps the SEC should take," especially as concerns disclosure, says Stephen Davis, chairman of the subcommittee and executive director of Yale University's Millstein Center for Corporate Governance and Performance in New Haven, Conn.