Exclusive: Wal-Mart improves lobbying disclosure after shareholder push
By Nathan Layne
CHICAGO (Reuters) - Wal-Mart Stores (WMT.N: Quote) said it will start disclosing directly to investors what it spends on lobbying on a state-by-state basis, responding to shareholder pressure to improve transparency on how the retailing giant seeks to influence public policy.
The previously unreported move would make Wal-Mart the first constituent of the Dow Jones Industrial Average to break out state expenditures at that level of detail, drawing attention to spending that in some states reaches hundreds of thousands of dollars. Wal-Mart's move could chart a course for others, just as rival retailers followed suit when it raised worker pay earlier this year.
While federal guidelines are uniform and fairly detailed, disclosure at the state level varies widely and information can be difficult to find, undermining attempts at oversight by outside groups. At the same time, gridlock in Congress has shifted the focus of some corporate lobbying to the states, raising the importance of transparency, disclosure advocates said.
Wal-Mart's decision to make state lobbying information more accessible is "exceedingly important" because spending at the state level can rival or exceed federal lobbying expenditures and also because of the company's size and influence across the corporate sector, said Timothy Smith, director of socially responsible investing at Walden Asset Management, which has backed several shareholder proposals seeking improved disclosure.
Since the first shareholder proposals targeting lobbying first appeared in 2011, there have been 143 resolutions on the ballots at 80 companies, and support has risen to an average of 29.2 percent of votes this year, according to proxy adviser Institutional Shareholder Services.
Wal-Mart's move falls short of what Zevin Asset Management sought when it submitted a shareholder resolution for wider disclosure at Wal-Mart, including any "indirect lobbying" through organizations like the U.S. Chamber of Commerce. Wal-Mart will not change its disclosure policies on trade associations, spokesman Randy Hargrove said.
Zevin Director Sonia Kowal said she withdrew the proposal as a sign of "good faith" after Wal-Mart agreed to aggregate state disclosures. She said she would resubmit the proposal next year.
Kowal said she has found Wal-Mart to be responsive to shareholder engagement "perhaps because they see disclosure of corporate involvement in politics as being increasingly important to investors and that interest is not likely to diminish." Continued...