F&C says no to political donations
GLOBAL – F&C Asset Management has labelled donations to political candidates and parties as “inappropriate” and called for greater transparency in its revised corporate governance policy on political lobbying and donations.
In a statement released this week, F&C said, “…Subject to legitimate considerations of commercial confidentiality, companies should be fully transparent about what they do and how.”
It went on to say that it considered donations made to individual political candidates, political parties and organisations associated with political parties as “inappropriate and should be strictly avoided”.
F&C director and head of governance and socially responsible investing Karina Litvack said, “In general, we believe that companies should avoid donations to political parties, to organisations closely aligned with specific political parties, and to individual candidates.”
This statement comes in the wake of the current high profile trial of former Washington powerhouse lobbyist Jack Abramhoff, which focused attention on politicians who accepted favours and the companies that financed his lobbying activities, said F&C.
It is also reminiscent of the collapse of American energy giant Enron, which not only funded American election campaigns but was also found to have donated roughly €87,000 to the Labour and Conservative parties in the UK.
Last week, the US-based Council of Institutional Investors (CII) stated its members would vote on whether companies should provide greater disclosure about political donations. The CII represents more than 100 pension schemes and institutional investors -- including F&C -- with more than €2.5tn in investments.
An F&C spokesperson told IPE that it felt “strongly” about political lobbying and donations, and the implications for socially responsible investing (SRI).
“It is something pension funds should actually look at if they want to be socially responsible in their investing. If the CII is looking at this seriously, then it definitely is an issue,” he said.
F&C is calling for companies to take measures such as publishing their overall lobbying policy and objectives, developing a code of conduct on lobbying, and establishing clear policies on avoiding conflicts of interest. It also stated that where companies make donations, shareholder approval must be sought.
F&C stated that it is currently contacting all the companies in which it invests to alert them to the new guidelines.