Company contributions are becoming increasingly transparent.

By James C. Hyatt

Disclosure of corporate political spending, expected to get increased discussion in the 2007 proxy season (see CRO Trends, Winter 2006 Issue), is gaining some traction.

Three major companies, Verizon Communications, Monsanto and General Dynamics, have committed to disclose some or all of their political spending made with corporate funds, according to the Center for Political Accountability and several groups helping press the issue.

Twelve other companies previously had adopted political transparency and accountability policies in 2005 and 2006.

Each company will post a complete list of corporate political contributions on its website and disclose the guidelines for its political giving. In addition, Monsanto and General Dynamics will join Verizon in establishing annual oversight of the corporate political contributions process at the board level.

General Dynamics has agreed to report and have board oversight of its payments to trade associations that are used for political purposes. In addition, Monsanto said that it will enter into a dialogue on transparency and accountability for trade association political spending. “These latest developments mark a major change in corporate outlook. Companies are recognizing that political disclosure and accountability must encompass the range of their political spending. They also see this as good corporate governance,” said CPA Co-Director Bruce Freed.

Advocates of the new policies, noting that associations aren’t required to disclose the specifics of their political spending or their membership, argue that “this secrecy leaves institutional investors and individual shareholders in the dark about the use of company resources for political activities.”

James C. Hyatt (JCHyatt@yahoo.com) a New York-based freelance writer formerly with The Wall Street Journal.