It’s a tale as old as time: corporations vying for influence in the halls of power. While it is reasonable for companies to look out for their business interests in the policy arena many do not share their lobbying activity with their shareholders or implement oversight policies that ensure that their lobbying activities do not put shareholders at risk.
With the 2016 election ushering the Businessman- in- Chief, Americans are witnessing the devastating effects of unchecked corporate privilege. The President does not think he needs to abide by the clause in the Constitution which calls for him to separate himself from his personal business dealings so as to ensure that he puts the interests of all Americans over his business interests. He has shown the American people that he will defend his profits over their rights, safety, and security.
Shareholders have been calling for corporate transparency around political and lobbying activities for more than a decade, and in this Presidential climate where CEOs are given cabinet positions and corporations are expecting to have their political backs scratched at every turn that transparency has never been more important.
Today, shareholders are asking the Walt Disney Company to dig a little deeper and be upfront with shareholders and the public by disclosing all of its state and federal lobbying and its memberships in and payments to trade associations.
Finding all of Disney’s lobbying is not easy based on inconsistent reporting requirements in the states. However, we do know that it’s been busy pushing its policy priorities by spending a combined $7.57 million in 2015 and 2016 on federal lobbying. What we know about Disney’s lobbying at the state level is that the company has as many as 40 lobbyists registered in the state of Florida and its operation there has been described as “the 800-pound mouse protecting its cheese in the backrooms of city hall and state government.”
The fact that Disney does not disclose its membership in trade associations that lobby on behalf their members raises even more flags. Disney is a member of the National Restaurant Association (NRA) according to the NRA’s website, and, evidently, it is a member of the U.S. Chamber of Commerce having joined in 1922 and not disclosed any information indicating that it has left since. Apparently, the company also sits on the boards of both the Florida and California Chambers of Commerce.
Disney has been linked to efforts by the National Restaurant Association and California Chamber to push back on raising the minimum wage, to stop implementation of paid sick leave, and to criticize parental leave laws. The U.S. Chamber of Commerce has questioned climate science and attacks energy policies that would safeguard public health and the environment. As the largest lobbying force in the country, the Chamber spent more than $103 million on lobbying in 2016. Disney should make clear whether it is fully supporting these policy priorities with membership dues or payments to these trade associations used for lobbying.
Shareholder support for disclose resolutions is growing every year as more and more people call for companies to be transparent about their political engagements. Even the Business Roundtable, a trade association for the nation’s leading CEOs, has softened its stance. As one of the most powerful lobbying forces in the country, the Business Roundtable went from staunchly opposing disclosure of corporate political and lobbying activities to recommending that its members choose for themselves whether to disclose.
Transparency and accountability measures are not just critical for creating checks on corporate political activity they are also in companies’ best interests as well.
President Trump has recklessly targeted specific companies in public comments and corporations are anxious to avoid being the target of one of the President’s tweets. The recent incident with Under Armor is an example of how a company’s public entanglements with the new Administration can pose a risk to shareholders. The athletic apparel company’s CEO Kevin Plank said in a CNBC interview that the President is a “a real asset for this country,” which sparked public backlash from some of the company’s celebrity brand ambassadors including Misty Copeland, Stephen Curry, and Dwayne “The Rock” Johnson. The celebrity criticism caused a Susquehanna Financial analyst to downgrade Under Armor’s stock to “negative” citing “reputational risk.”
In the case of Disney, the company’s CEO Bob Iger sits on Trump’s closed- door business council to offer advice on behalf of Disney and the wider entertainment industry. The council meets in an unofficial capacity so as to skirt requirements that make it possible for the public to know what happens in the meetings. After strong customer backlash for being associated with Trump’s travel- ban executive order Uber’s CEO Travis Kalanick dropped his involvement in the council.
Shareholders should be concerned about Disney’s opaque lobbying activities and the risk that comes with Iger’s continued association with the Trump administration policies. At the very least, Disney should let shareholders be its guest to its lobbying information and CEO Bob Iger should consider whether he wants to be the hero or the villain of this fairytale.