Gillian Tett is right to draw attention to the obligation of business leaders to play a role in the defense of democracy (July 1 Opinion).
However, it misses a key point: it is even more important that their owners play a similar role – especially larger shareholders such as those who call themselves “universal owners” and investment management companies ( who miss no opportunity to assert the primacy of shareholders over corporations). America.
Moreover, it is a mistaken belief that disclosure will help protect American democracy. This will not be the case.
First, voluntary disclosure, without any legally binding reporting standards or third-party auditing, will have no value (much like unregulated creative accounting would).
Second, there is no time. Passing enough shareholder resolutions to force widespread adoption of even voluntary, unaudited disclosure standards in the S&P 500 alone will likely take five to 10 years (optimistically).
Third, disclosure will result in massive amounts of complex data, given the myriad ways in which corporate treasury dollars indirectly fund anti-democracy candidates (including through trade associations and 527 groups). Getting shareholders to use this disclosure would require employing armies of analysts to decipher which companies to target.
Fourth, misinformation is at the heart of the antidemocratic model. Disclosure is likely to be (ab)used by anti-democracy actors and thus become a personal goal for democracy advocates.
The answer is provided by Leo Strine and Dorothy Lund in their recent article. Corporations are huge funders of the political system: they should stop. “There is no legitimate corporate political donation program,” Lund and Strine wrote. “Companies should completely stop political spending.” This is a misuse of shareholder resources.
Washington, D.C., United States