CAMPAIGN CONTRIBUTIONS Companies need to align spending with their values

The high-stakes November elections and a plummeting level of trust in core U.S. institutions provide an opportunity for responsible American corporations to speak out on key issues and rebuild trust. It starts with aligning political contributions with corporate values.

Businesses will come under intense pressure to make political contributions in an election year that will decide control of Congress and statehouses and potentially determine a president’s legacy. In today’s incendiary, polarized climate, business leaders would be smart to reset the way their companies engage in the political process. Business leaders need to take a thoughtful, values-based, principles-driven approach to campaign contributions that avoids suggestions of hypocrisy that could damage their reputation, brand and bottom line.

Today, a sea change in civic and political engagement by corporations is under way. CEOs have spoken out or resigned from presidential advisory councils after white supremacist violence in Charlottesville, Va., last year and a presidential response seen as inadequate and at odds with fundamental American values. Scores of CEOs are calling on the Trump administration to preserve the Deferred Action for Childhood Arrivals program. Companies were reaffirming their support for the Paris climate accord at the same time as the United States was withdrawing from it.

The Center for Political Accountability’s new study, “Collision Course: The Risks Companies Face When Their Political Spending and Core Values Conflict and How to Address Them,” argues that when companies contribute to political campaigns, they expose themselves to potential risk if policy outcomes clash with core company values and policies. Look no further than the more than 200 CEOs demanding repeal of a North Carolina law that blocked transgender individuals from using restrooms in publicly owned buildings that correspond to their gender identity.

Shortly after the measure was enacted in 2016, a Huffington Post article skewered 45 corporations publicly opposing the law for helping to elect the law’s supporters. Those companies had donated generously to a national political committee, allowed under law to accept direct corporate contributions, that helped switch partisan control of the North Carolina legislature in the 2010 election. The group spent at least $1.6 million to affect the state’s legislative elections from 2010 through 2015.

Another example involves climate change. “These companies support climate action, so why are they funding opposition to it?” demanded a headline from the Center for Public Integrity, one of the country’s oldest nonpartisan investigative news organizations. It examined more than a dozen companies that publicly supported preserving the U.S. role in the Paris climate accord while donating more than $3 million to the Republican Attorneys General Association, an organization dominated by conservative attorneys general who went to court in 2015 to quash President Obama’s Clean Power Plan.

Why are these and other examples of disconnects between the outcomes of company political spending and core values so important now?

Because U.S. companies have never had a greater responsibility to act with integrity and transparency.

In its 2018 Trust Barometer, the global communications marketing firm Edelman Inc. said trust in institutions in the United States has crashed. According to Richard Edelman, president and CEO, “Nearly 7 in 10 respondents say that building trust is the No. 1 job for CEOs, ahead of high quality products and services.

“In losing the battle for trust, the biggest victim has been confidence in truth,” Edelman Inc. noted. In an angry “gotcha” social and digital media world, mere hints of corporate hypocrisy can undermine truth — and a company’s good reputation.

If responsible corporate leaders focus on ensuring alignment between corporate values and policies, they will better serve shareholders, consumers and society at large.

Daniel T. Bross is a senior adviser with Article One Advisors and the retired senior director of business and corporate responsibility at Microsoft. Bruce F. Freed is president of the Center for Political Accountability, a nonprofit that works to bring transparency and accountability to corporate political spending. To comment, submit your letter to the editor at SFChronicle.com/letters.