BlackRock's newly-posted commentary on corporate political activities provides welcome insight as to its approach to evaluating corporate political activities-related shareholder proposals. Notably, BlackRock "generally believes it is the duty of boards and management to determine the appropriate level of voluntary disclosure of corporate activity."
When faced with a political activity shareholder proposal, BlackRock will consider several factors including the company's political activities-related governance framework, its existing level of disclosure, the materiality of the requested disclosure, any threats/harm to shareholder interests, and the proposal's scope and level of specificity.
In considering companies' approach to political activity disclosure, BlackRock has identified these "best practices," which it encourages companies to follow:
- Disclose on the company website or through a separate report linked to the company website the company's policy for political expenditures from corporate assets, including lobbying activities
- Ensure that appropriate oversight of political activities is in place, which in many cases would include oversight by the appropriate board committee. This oversight could include review of the company’s policy on political expenditures and lobbying activities
- Affirm compliance with federal laws governing political activities and in particular the Lobbying Disclosure Act ("LDA")
- Include links to relevant websites that contain the company’s federal lobbying reports under the LDA as well as any company-related PAC political expenditures
- Affirm compliance with state laws and disclose significant state lobbying activities, if any
The informative commentary also notes that BlackRock generally doesn't support overly prescriptive disclosure proposals or proposals seeking a shareholder vote on corporate political activities or expenditures, which it deems to be within the board's/management's purview.