IR Magazine:
In the aftermath of the January 6 insurrection, nearly 190 US companies suspended contributions through their political action committees (Pacs) to the 147 US Congressmen and Congresswomen who voted not to certify the results of the US presidential election. Then in April 2021 hundreds of public company chief executives co-signed a letter that ran in both the New York Times and the Washington Post, opposing voter suppression efforts.
These actions by US corporate leaders drew ire from senior Republicans – including Senate and House minority leaders Mitch McConnell and Kevin McCarthy – and cautious praise from civil rights organizations and groups such as Citizens for Responsibility & Ethics in Washington. But as we’ve seen during the last couple of proxy seasons on issues like climate change, stakeholder capitalism and racial equity, investor advocate groups plan to hold companies accountable to their progressive messages and root out empty promises.
Toyota bore the brunt of a public backlash in early July, when campaign finance documents revealed that it has been the largest corporate donor to politicians who objected to the results of the 2020 presidential election. During the first six months of 2021, the Japanese car manufacturer, which did not announce any suspension of donations following January 6, donated $55,000 to 37 Republican politicians who voted not to certify the results of the election, according to a study by Axios.
In response to the backlash, Toyota acknowledged in a statement that its contributions had ‘troubled some stakeholders… and, at this time, we have decided to stop contributing to those members of Congress who contested the certification of certain states in the 2020 election.’
Investigations by other major US publications have uncovered instances of alleged donations by US public firms that contradict their messaging after January 6. In each case, the company has defended its contributions on technicalities: for example, that it said it would suspend donations to politicians who incited violence, not politicians who opposed the result of the presidential election.
In realistic terms, for many public companies it won’t be a matter of if but when they resume suspended contributions – either directly through Pacs or trade associations, or via other routes….