Le Lézard
Classified in: Business
Subjects: NPT, ECO, ESG

Report: As Corporate Political Activity Becomes Riskier, Companies Need a Full-Scale Review of Their Strategy and Relationships


NEW YORK, May 12, 2022 /PRNewswire/ -- A survey by The Conference Board released earlier this year found that fully two-thirds of companies found the environment for corporate political activity to be challenging to extremely challenging. And nearly all (87 percent) believed 2022 would be at least as challenging. That is proving true, as the combination of the mid-term election year, contentious primaries against incumbents, redistricting, increased federal and state regulation, scrutiny by multiple stakeholders and the media, and pressure on companies to take a stand on a raft of hot-button issues at the federal and state levels are making 2022 especially difficult. 

A new report by The Conference Board ESG Center provides several key recommendations to help companies navigate this environment:

The report's insights are based, in part, on a roundtable convened under the Chatham House Rule with corporate executives, directors, and experts. The report also includes insights from?and is a follow-up to?a survey released in January, which gauged US corporations about developments in corporate political activity and their expectations and plans for 2022. 

"The case that companies make for their political activity needs to go beyond the legal argument that corporate lobbying and contributions are constitutionally protected activities," said Paul Washington, co-author of the report and Executive Director of The Conference Board ESG Center. "If companies engage in political activity, they need to stop playing defense, and instead emphasize how their political actions not only advance the firm's business interests, but also serve a social and/or environmental purpose that is tied to the core business."

The Conference Board report was developed with support from Altria, Prudential Financial, Sempra, and Steptoe & Johnson. The report offers the following findings and insights:

Risk Awareness: Develop Comprehensive and Up-to-Date Assessments of Corporate Political Risks

Strike a Balance: Regularly Evaluate the Costs and Benefits of Corporate Political Activity

Education for All: Conduct a Broad-Based Campaign to Educate Stakeholders

Be Ready for Provocation, But Resist the Temptation to Always Respond

"While developments at the national level often dominate the headlines and airwaves, activity at the state level can have a profound impact on a company's political activity and reputation," said Bill Black, co-author of the report and Program Director of the Government Relations Executives Council at The Conference Board. "Significant regulatory activity is underway in many states, relating to lobbying reform, campaign finance reform, and election registration and voting rules. Moreover, it is at the state level that hot-button issues often arise. To reduce the risk of being caught off guard, companies should be sure to devote attention and resources in states where they have substantial business operations, workforces, or customers."

Manage Expectations: Don't Overpromise

Lobbying: Focus on the Long-Term

Corporate PACs: Prepare for More Challenges; the Dust Has Not Settled

About The Conference Board ESG Center
The Conference Board ESG Center serves as a resource, platform, and partner to help Member companies address their priorities in corporate governance, sustainability, and citizenship. www.conference-board.org/ESG 

About The Conference Board
The Conference Board is the member-driven think tank that delivers trusted insights for what's ahead. Founded in 1916, we are a non-partisan, not-for-profit entity holding 501 (c) (3) tax-exempt status in the United States. www.conference-board.org

 

SOURCE The Conference Board


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