And because investing has expanded over the past few decades - today, nearly one in every two American households owns stocks - when we talk about these shareholders, we are literally talking about the public, not an elite class of investors.
Unchecked corporate political spending is a threat to the right of shareholders - or those who own the company - to support candidates of their own choosing.
The idea that U.S. corporations can make unlimited political expenditures without giving its shareholders any knowledge of the spending or receiving their consent is an appalling one.
This concept was driven home with force last fall when Target Corp. faced extreme backlash for its decision to donate to the nonprofit MN Forward, which backed a gubernatorial candidate in Minnesota who opposed same-sex marriage. A strong state political spending disclosure law enabled shareholders and the public to see this contribution.
Because Target had spent years building up an image as a liberal corporation, it was subjected to threats of a boycott as well as negative press by this decision.
Thanks in part to this public pressure, last month Target adopted a new policy to disclose its campaign contributions and require more scrutiny from the board before spending in politics.
This story is important because it shows that the public and the shareholders who own a company can pressure a corporation successfully about political spending choices it makes.
However, a key part of this story is Minnesota’s disclosure law. The information that came to light because of the law was critical in enabling shareholders to apply this type of pressure. Without this law, the information on the political spending would not have been available at all.
There are a number of ways to make this information available to shareholders nationwide. States can pass disclosure laws as well as laws that require shareholders have a say in their companies’ political spending, as can Congress at the federal level, by passing Representative Mike Capuano’s soon-to-be-reintroduced Shareholder Protection Act. Or, shareholders can organize within their corporation and press for it to adopt these types of reforms internally.
Now that corporations have been given the right to freely spend shareholder investments in elections, they also should be required to disclose their political spending to their shareholders, and shareholders should be granted the right to consent or oppose to that political spending. Without these safeguards in place, the license to spend that has been granted to corporate entities tramples harshly on the rights of shareholders.
Lisa Gilbert is deputy director of Public Citizen’s Congress Watch division.