[We’re pleased to welcome author Murad Mithani of the Stevens Institute of Technology. Mithani recently published an article in Business & Society entitled “Corporate Political Transparency.” Below, Mithani explains the inspiration for conducting this research:]
The idea for this study came during a preliminary investigation of managers’ thinking patterns when they are making campaign contributions. It appeared that regulatory and social implications of disclosure were one of their major concerns. This led me to think if legal enforcement regarding mandatory disclosure of political contributions can make firms fully transparent. Further exploration made it clearer that neither executives nor legislators wanted transparency. They were willing to do whatever was possible to discourage such a regulation, and when that would fail, they were likely to reframe campaign contributions as non-political giving such as charity. In sum, I was expecting that legal enforcement of corporate campaign disclosure may have limited effect. When I found the context of India and compared the ratio of disclosures due to purely legal enforcement and then subsequently when the legal enforcement was coupled with a regulatory incentive, I was surprised by the difference. There was a dramatic increase in the proportion of disclosures suggesting that most firms were unwilling to declare their political ties in the absence of an economic benefit.
I hope my findings can encourage a more informed discussion on the regulatory aspects of corporate campaign contributions. With so much at stake for corporations, legislators and the society, it may be worth discussing the mechanisms that can make it easier for firms to disclose their political choices. Although economic incentives may not reveal all political contributions, the findings of my study suggest that they can be an important step towards transparency.
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