Readers following my series of blog posts on shareholder proxy resolutions submitted by religious groups such as As You Sow and the Interfaith Council of Corporate Responsibility already know these resolutions have little to do with issues of faith. In fact, an overwhelming majority of these resolutions concern corporate speech and attempts to stifle it.AYS and ICCR – as well as a host of other religious shareholders – submit proposals drafted by Bruce Freed, head of the Center for Political Accountability. Freed’s CPA and the Wharton Business School’s Zicklin Center, readers will recall, issued its annual index late last month. My last post detailed in part the wrongheadedness of shareholders pushing a political agenda at the expense of their fellow shareholders. However, I anticipate most readers require a bit more than your lowly scribe’s word that the CPA-Zicklin Index not only inflates the results of its shareholder resolutions but as well operates on behalf of groups more interested in shutting down corporate political speech.
The Center for Competitive Politics, a First Amendment nonprofit think tank located in Alexandria, Va., brings more firepower to arguments I’ve already made regarding the efforts of CPA and the proxy shareholders for whom Mr. Freed drafts resolutions. Regarding the CPA-Zicklin Index, CCP issued a statement by CCP Chairman Brad Smith, former Federal Election Commission Chairman:
To look at the CPA-Zicklin Index as a measure of ‘best corporate practices’ is like asking a wolf to describe ‘best practices’ for sheep … Corporations have an obligation to do what is in the best interest of their shareholders, not comply with the demands of a non- profit that opposes speech by the business community.
With all of the misinformation peddled by groups like the Center for Political Accountability, it’s important to recognize the implications of activist investing and dragging the SEC into politics … CPA has no obligation to worry about the actual interests of shareholders, and nothing suggests that they have the best interest of the business community at heart.
Elsewhere, CCP describes the CPA-Zicklin Index as “another flawed and partisan grading scheme on companies’ disclosure practices,” exhibiting
… shoddy practices and ulterior motives behind tabulating the index and proxy results. Bruce Freed, the President of the CPA and his allies including Wharton are a coordinated group of economically disinterested groups who are working together to create the illusion of a mainstream mandate for companies to cease public affairs activities altogether. An idea a wide majority of economically interested shareholders reject year after year.
CCP reports that Freed’s CPA was established with $1.2 million from George Soros’ Open Society Foundations. Not only has CPA targeted major corporations in its “name and shame” disclosure tactics, but as well worked to squelch funding of industry-friendly groups such as the American Legislative Exchange Council and the U.S. Chamber of Commerce. CCP quotes Freed:
CPA and our partners are putting pressure on companies to adopt political disclosure, to curb the independence of trade associations, and to change the behavior of companies and trade associations in their political spending … I think what’s critical to remember is that the CPA strategy is not vulnerable to political obstruction or legal challenge. What we’re finding is that corporate governance offers a route that allows the issue to be addressed almost unimpeded. (The Transparency Agenda, Weekly Standard, May 13, 2013)
Most telling, is it not? And yet, AYS and ICCR have cast their respective lots with an organization intent on mounting a sustained attack to weaken First Amendment guarantees of free speech – the very same Amendment protecting freedom of religion. One wonders if these so-called religious activist shareholders have made this connection.