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Corporate money in 2016 politics: When is it consistent with shareholder value?

Government public policies can have profound effects on company employees, customers and shareholders. But smart corporate boards step forth carefully to avoid major pitfalls.

To play or not to play in politics? For companies, it’s not as easy as it may sound.

So The Conference Board has published a “practical — and ethical — guide both for companies newly considering political involvement and those with decades of political relationships on all levels.”

Just in time. The Iowa causes loom, many state primaries will soon follow and 2016 politics will morph quickly into a pivotal presidential campaign. Moreover, the new Conference Board report, “Corporate Political Spending” (second edition) observes that there is “a growing public perception of corruption in America through three separate trends: a rise in the size and scope of government, increased campaign costs, and the growing power of lobbying.”

Corporate affairs and public relations executives will value the report’s emphasis on disclosure: ” … most corporations that have achieved positive results have used … a commitment to transparency.” Produced by the Board’s Committee on Corporate Political Spending, it presents a fulsome discussion of various approaches to, and levels of, disclosure and cautions that “… any company that chooses to be politically active eventually must decide not only which candidates and causes it will support … but how much information to disclose about any or all of those activities.”

The risks implicit in corporate political activity, according to “Corporate Political Spending”, include legal liability, reputational damage and business strategy misalignment.

Anyone who believed the 2010 Citizens Union Supreme Court decision would open the floodgates of corporate political spending would do well to reflect on the impediments to so great a flow. In fact, a significant number of major companies do not make such expenditures.