The Wall Street Journal-20080114-Corporate Governance -A Special Report-- What-s New- Dispatches from the staff of the Dow Jones corporate governance newsletter
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Corporate Governance (A Special Report); What's New: Dispatches from the staff of the Dow Jones corporate governance newsletter
Following the Money
The pace of companies adopting policies to disclose their political spending has quickened, with 18 more companies in the Standard & Poor's 500 index agreeing last year to disclose such spending. According to the Center for Political Accountability, a Washington- based shareholder-advocacy group, that brings the total to 33 among the S&P 500. Without proper transparency, disclosure advocates argue, corporate funds may be misused.
The As You Sow Foundation, a shareholder-advocacy group based in San Francisco with an interest in corporate social and environmental issues, says the number of proxy proposals for disclosure on political spending jumped to 60 last year, a 50% increase from 2006.
Unisys Corp. shareholders, for instance, recently showed significant support for a proposal to ask the technology company to disclose its contributions to political candidates, trade associations and political organizations known as 527 groups. Of shareholders who expressed an opinion on the proposal, 51% were in favor, despite the opposition of the Unisys board, according to a Securities and Exchange Commission filing.
But Unisys rejected the proposal. Company spokesman Jim Kerr says that, including abstentions, the proposal received about 40% support. He says Unisys wouldn't have been compelled to make the disclosures regardless of the vote. In opposing the proposal, Unisys said the amounts of its political contributions are "insignificant" in relation to the company's size. Moreover, Unisys said, it has effective reporting and compliance procedures in place.
Companies that adopted policies last year to disclose political spending include General Electric Co., Home Depot Inc., Pfizer Inc., Dell Inc. and Oracle Corp.
Special Meetings
Honeywell International Inc.'s announcement last month that it plans to give individual shareholders with a combined stake of 25% or more in the company the right to call special meetings came amid a push by investors in several companies for that right.
Individual investors filed a series of proposals last year asking for the right of holders of a combined 10% to 25% stake to call special meetings. At the 13 companies where preliminary or final results of voting on such proposals have been released, support averaged 57%, according to data compiled by ISS Governance Services, a unit of New York-based RiskMetrics Group Inc. The highest known vote in favor was 72.4% at Honeywell, a technology and manufacturing company based in Morris Township, N.J. The lowest, 19.3%, was at Ford Motor Co.
The vote at Honeywell was to ask the board to consider changing the rules. At this year's annual meeting, in April, shareholders will vote on a change in the company bylaws that would put the proposal into effect. Currently, only Honeywell's chief executive or a majority of the board can call a special meeting of shareholders.
Proxies Go Online
Beginning this year, U.S. shareholders will be able to choose to receive proxy-voting materials online or on paper. The Securities and Exchange Commission approved a rule change in May that allows companies to move to an online-oriented proxy system, with an option for those who prefer paper to receive printed material upon request.
The online push will be phased in over two years, starting with large public companies in 2008 and extending to smaller firms and mutual funds next year. The shift is expected to lower costs for both shareholders and companies to communicate with one another.
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Compiled by Andrew Yurkovsky, editor of Corporate Governance, a newsletter published by Dow Jones & Co. (online at cg.djnewsletters.com), based on contributions from reporters Antonie Boessenkool, John Flowers and Judith Burns. Mr. Yurkovsky can be reached at [email protected].
