Corporate Political Transparency: Challenging Assumptions

[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:]words-1752968_1280

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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This entry was posted in Corporate Governance, Politics, Transparency by Cynthia Nalevanko, Editor, SAGE Publishing. Bookmark the permalink.

About Cynthia Nalevanko, Editor, SAGE Publishing

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 1500 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, Washington DC, and Melburne, our publishing program includes more than 1000 journals and over 900 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

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