February 3, 2010
Supreme Court's Campaign Finance Ruling on 1/21/10
We are in a time of sweeping decision making vis-à-vis the U.S. Government. The latest ruling will allow corporations and labor unions to spend freely from their treasuries on television ads and other forms of direct advocacy, for or against a candidate's election. In this break with precedent, the Court also overturned a prohibition on corporations and labor unions from airing what is described as "issue" ads which are commercials that do not expressly advocate for the election or defeat of a candidate and often air in the final weeks of a campaign. What's next could be a law proposed in Congress to require transparency and shareholder input on money that is spent under this change. While the practicalities of this rule change are yet to be seen, the possibilities for negative consequences on corporate spending in this area exist. Questions director's need to ask in their oversight role might include:
1.What are the business implications that any funding may have?
2.How might shareholder's interpret any campaign funding?
3.How can we demonstrate a leading practice around transparency?
4.Could funding in this area appear to conflict with our corporate values?
5.What has a competitor done successfully that we would not choose to do as a
matter of principle?