Corporate Political Disclosure and Shareholder Voting

Abstract

We combine empirical analysis and qualitative research to offer new insights into the shareholder voting process. Our research focuses on shareholder proposals requesting increased disclosure of corporate political activity. These proposals are notable for three reasons. First, they are among the most enduring categories of shareholder proposals and have consistently received substantial amounts of support from shareholders. Second, because political disclosure proposals tend to be relatively low salience, they shed light on the dynamics of the proposal process when it is least likely to attract outside attention. Finally, the Supreme Court in Citizens United placed corporate political influence squarely in the realm of corporate governance. Studying political disclosure proposals sheds light on the effectiveness of this mechanism in providing transparency about corporate political activity. 

We analyze the basis on which issuers are targeted with political disclosure proposals, the result of such targeting, and the targeted firms’ subsequent disclosure practices. In sum, we find that a diverse array of investors sponsored the political disclosure proposals in our sample (2015-2023), the proposals tended to be relatively successful, and disclosures tended to improve in subsequent years. On average, both the targeting and voting.