@AMOLMEHRA wrote an excellent piece for Forbes CSR blog. Until businesses see democracy, along with sustainability, as part of CSR, they do not represent The Responsible Business. Every action, including how they manage employees, promote democracy. Engaging in dialogue and building non-hierarchical organizations supports democracy. People learn to blame others when not in a self-organizing self-directed organization. And Mehra has reminded us that a business cannot be fully socially responsible unless it makes its decisions and actions transparent, which democracy depends on. Here is part of the story:

“Questions of transparency have also arisen in the context of this election as some groups spending in this election cycle are not required by law to disclose their donors.  Thus, the dawn of a new era, one that makes many, including this author, uncomfortable.

A survey by Zogby International reveals that many American business owners are concerned about the pressure to donate to political campaigns. The survey also lays out  the growing number of undisclosed contributions made by corporations.  Six in ten business leaders said they felt pressure to help fund political efforts. Approximately 77% said that organizations should disclose all of their direct and indirect political expenditures. Of the 301 business leaders who were polled, two-thirds agreed that a lack of transparency in political activity encourages behavior that damages its reputations and puts a corporation at legal risk.

Even media outlets are finding it difficult to keep up, with inventory for air-time shrinking as Ken Wheaton reported in Advertising Age, points out. He quotes a general manager of a network affiliate: “Yes, there’s definitely a lot of political advertising, and it does put a lot of pressure on your inventory. It’s a bit of a juggling act. You have to manage it.”

Shareholder groups have been anticipating this outcome since the Citizens United case was decided.  As reported by the Christian Science Monitor, in late February, the Center for Political Accountability (CPA) and the Council of Institutional Investors jointly sent letters to 427 of the companies in the S&P 500 stock index, asking them to disclose all their political contributions. The letters, signed by 44 other groups, also asked corporate boards to approve and review all company political outlays.

Another example of shareholders demanding a say on political contributions: the $129.4 billion New York State Common Retirement Fund in Albany asked American International Group (AIG) to give shareholders a vote on its political spending for the prior year, a request the fund calls unprecedented.

The record number of dollars spent this election is a boon for the advertising industry, but raises some serious questions that we as shareholders and citizens need to ponder. By not demanding transparency in political spending, and flooding the airwaves with advertisement after advertisement, we are cheapening our democracy.  The Supreme Court has indicated an unwillingness to stem this flow. Nevertheless, smart companies should know better than to get too political. If they don’t stop spending on politics, their shareholders should speak out.”

Thanks Mehra