Is the 2016 election cycle the most important in a generation? Does 2016 represent a sea-change for our national politics?
All good questions, and if nothing else, the national race thus far has provided a lot to talk about. We also know that the money and resources organizations are providing to these races post Citizen’s United has increased and the number of organizations that are participating has skyrocketed.
But not every organization has a history of being involved nor a history of ensuring compliance and an orderly, transparent process for that involvement. For organizations that are new to political giving the potential downside can be great and cause an unnecessary hit to the organization’s reputation or a costly compliance failure. And that’s certainly not how organizations, and their compliance officers, want to spend this season.
Also, organization’s shareholders are expecting to see transparency and compliance on this issue. Just last week the Wall Street Journal noted that while investors aren’t expecting the flow of money to stop, they are “asking for consistency in a company’s stated goals and its political spending, [and] saying disclosure will provide transparency and accountability to the issue.” http://blogs.wsj.com/riskandcompliance/2016/03/03/corporate-political-spending-becomes-compliance-issue/
Bill Lawlor, a dean of corporate governance law, also predicts in the Wall Street Journal article that we will see the SEC adopt rules for disclosure in the next few years. So it’s wise to get ahead of this curve.
So, if it is imperative that compliance know what’s going on, has a plan to handle these issues, and is doing its best to be transparent, what does that all look like?
Back during the last national election cycle in 2014 I spoke with Wes Bizzell about common pitfalls and best practices to avoid missteps with regard to political giving and that discussion can be watched here: https://www.youtube.com/watch?v=H1Exl1FzsJM
Many of these considerations, especially for organizations that are new to the game, are still of prime concern today. Have a process. Be consistent. Train. Communicate to your employees, the board of directors and other stakeholders. Know who and what your organization is giving to. Don’t get caught flat-footed.
But the main point is this: now is the time to consider policy, process, communication and training for your organization to avoid a costly mistake that can negatively impact your organization’s reputation.
So, while you should enjoy the show, pay attention to your organization’s participation so that you don’t become a headline.