Shareholder group calls for end to ASX-listed political donations

At the federal level, political donations over $14,500 must be disclosed annually. Griffiths said some companies made multiple donations of $10,000 to evade those requirements, which kept investors in the dark. She said executives also buy $10,000 tickets to political fundraising events to gain access to decision makers, which companies rarely disclose.

“There would be no public record on this, which means there would then be no opportunity for shareholders to follow this and ask questions,” she said. “These are the kinds of situations that could happen relatively easily, within the rules, but outside the ethics of a publicly traded company.”

Grattan Institute chief executive Danielle Wood said the companies defend political donations by explaining that the payments are made to both parties in an effort to support the democratic process, but in reality the payments give to companies with resources. sufficient access to the legislative process.

“It remains to be seen whether this is a good use of shareholders’ money,” she said. “It may be to the extent that there is shareholder value, but it is the type of value that is not particularly good from the perspective of the whole of society, where the people have a stronger voice in debates because they have the money to afford it.”

ISS proxy adviser, head of research, Vas Kolesnikoff, said companies with strong government relationships can create shareholder value, giving the example of Wesfarmers which kept Bunnings stores open during the pandemic.

However, Kolesnikoff said these companies have access to politicians whether or not they donate. “Small donations are small – it’s to keep your finger in the pie. But it’s more a matter of governance because it’s shareholders’ money.

Corporate governance expert Helen Bird said political donations are often small and not market-sensitive, meaning there was no requirement for ASX-listed companies to disclose payments to the beyond AEC requirements.

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Bird, a lecturer in governance studies at Swinburne Law School, said companies give money to a range of political bodies, including individual politicians, parties and lobby groups, to ” buy favors” in the government. “You give money to various lobby groups, they get you a meeting with the relevant minister or body.”

A parliamentary inquiry launched in 2017 made a number of recommendations aimed at reducing the risk of political donations weighing on the integrity of government, including lowering the disclosure threshold to $1,000, requiring continuous and timely reporting real donations, by introducing a ceiling on donations and prohibiting foreign donations. donations.

Bird agreed that there needed to be more frequent disclosure of donations because the delays made it difficult to “tie the line” between payments and influence. She said the mining industry has for years pursued an aggressive approach to government relations to minimize taxation and environmental, social and governance (ESG) regulations.

“What has been completely understated is that the Prime Minister was in Western Australia last week announcing that there would be no new fees or taxes on mining companies and a reduction in mining requirements. compliance for carbon emissions,” Bird said. “This is the one where you think – how did that happen? We just agreed [net zero by] 2050 and we are already giving up on making changes to the regulations. »

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