The Robert Zicklin Center for Corporate Integrity launches Baruch Index
Published: Monday, September 19, 2011
Updated: Monday, September 19, 2011 11:09
The Robert Zicklin Center for Corporate Integrity (RZCCI) launched the Baruch Index of Corporate Political Disclosure on September 15, 2011. This Index will enable corporations to be much more active in election campaigns.
The Index was compiled by Donald Schepers, professor of Management at Baruch College and director of the Robert Zicklin Center for Corporate Integrity, along with Naomi Gardberg, associate professor of Management at Baruch College throughout the course of 2010 and 2011.
RZCCI "initiated the creation of the Baruch Index in order to track corporate disclosure of the influx of corporate money into the campaign system, with the intent of spurring better corporate governance," said Gardberg.
The Baruch Index of Corporate Political Disclosure was funded by a grant from The City University of New York PSC-CUNY Research Award Program.
The launch of the Baruch Index ws also made possible with the help of : Responsive Politics' federal corporate finance data, the National Institute on Money in States Politics' state corporate finance data, Louis Lipani, Vinny Wong, and Lawrence Zicklin.
The Baruch Index measures companies' level of corporate political activity transparency across "57 items split along three dimensions," said Gardberg.
The three dimensions measured were ease of access; policies, procedures, and corporate government structures in place and disclosed; and company's outlook on whom and what it gives to, and how those donations are made. The Index researched the S&P 100 and found that only twenty-two percent of them "disclose little or nothing about their corporate political activities," said Gardberg.
Out of all the companies, Pfizer was among the seven exemplary companies that scored within the top 81-100 transparent percentiles, across all fifty-seven items. Hence the essential participation of Pfizer's senior corporate counsel, Barbara Bonfiglio, at the panel discussion moderated by GovernanceMetrics International's Chief Analyst and founding members, Ric Marshall, preceding the index's results and research presentation. It is surprising to see that the Pharmaceutical, Consumer Products, and Petroleum industries led as the top three most transparent industries with regards to political activity.
Over 50 percent of companies scored within the 80-41 moderate transparency percentile, with 25 companies scoring above 60.
Out of the 28 companies that didn't make it above the twentieth percentile of transparency were notable corporations such as Sprint Nextel Corporation, Wal-Mart Stores, Inc., and The Walt Disney Company.
Pfizer's commitment of transparency to its shareholders is represented in its corporate governance strategy that not only has measures approved by its own board, but a representative cross-dimensional steering committee.
"It's not just one person," explained Bonfiglio.
Hans Von Spakovsky, senior legal fellow at the Heritage Foundation, explained the need to adapt these measures on a larger scale to unions that contribute to political campaigns, as well as look into the higher tier of corporate spending charities.
"It is vitally important for our democracy to have transparency and for corporations to be transparent. Voters should have the right to know who donated, just as shareholders and consumers should know where their money is going," said J. Adam Skaggs, senior counsel for the New York Law School's Brennan Center for Justice's Democracy Program.
Over the last couple of years campaign pack contributions have increased dramatically and so has the inefficiency of political leaders.
Hence this measure can really help voters see whose agenda these officials are following, as well as provide an avenue for corporate stakeholders to have an active and informed voice in regards to the allocation of their investments.