Why Companies Should Stop Political Spending Now

HBR IdeaCast

Harvard Business Review

Leadership, Entrepreneurship, Communication, Marketing, Business, Business/management, Management, Business/marketing, Business/entrepreneurship, Innovation, Hbr, Strategy, Economics, Finance, Teams, Harvard

4.4 • 1.9K Ratings

🗓️ 25 January 2022

⏱️ 27 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

A decade ago, the U.S. Supreme Court changed the rules on how businesses could donate to political campaigns. Since then, hundreds of millions of corporate dollars have been spent on local, state, and federal elections, often without transparency. Many CEOs and boards feel this is the only way they can curry favor with policymakers. Dorothy Lund, an associate professor of law at the University of Southern California, and Leo Strine Jr., counsel at Wachtell, Lipton, Rosen, and Katz and a former Chief Justice of the Supreme Court of Delaware, say this isn't just bad for democracy. It's bad for business because it distracts companies from innovation and growth and risks serious backlash from consumers, employees, and shareholders. They suggest ways to dial back corporate political spending and improve the economy for all. They are the authors of the HBR article "Corporate Political Spending is Bad Business: How to Minimize the Risks and Focus on What Counts.”

Transcript

Click on a timestamp to play from that location

0:00.0	So you got the job. Now what? Join me, Eleni Mata, on HBR's new original podcast, New
0:08.1	Here, the Young Professionals Guide to Work, and how to make it work for you. Listen for
0:13.8	free wherever you get your podcasts. Just search New Here. See you there!
0:30.0	Welcome to the HBR ADCAS from Harvard Business Review. I'm Allison Beard.
0:41.6	In 2010, the U.S. Supreme Court issued its ruling in the Citizens United versus Federal
0:54.7	Election Committee case. Companies were free to fund political candidates and campaign
0:59.3	committees. Whereas before those donations were limited and had to come from a pool of
1:03.6	money collected from employees and shareholders, they're now unlimited and can be paid
1:08.1	out of the corporate treasury. And it's a lot of money. Hundreds of millions of dollars.
1:14.3	Many people think this is really bad for our democratic process. Today's authors say
1:18.6	it's also bad for business. It locks companies into an influence buying arms race, opens
1:24.2	them to criticism when their public ESG stances don't align with those of the politicians
1:28.7	they support, and distracts them from more important work.
1:32.9	Dorothy Lund is an associate professor of law at the University of Southern California.
1:37.1	Leo Stryne Jr. is counsel at the law firm of Wachtel, Lipton, Rosen, and Katz, and the
1:42.1	Michael L. Wachter Distinguished Fellow at the University of Pennsylvania's Carrey Law
1:45.7	School. He's also a former Chief Justice of the Supreme Court of Delaware. Together,
1:50.7	they wrote the HBR article, Corporate Political Spending is bad business. How to minimize
1:55.5	the risks and focus on what counts. Dorothy, Leo, welcome. Thanks so much for having us.
2:01.2	Good to be with you.
2:04.7	So let's set the scene for everyone. The Citizens United ruling allows corporations to
2:09.7	do what that they couldn't before 2010.
	...

Please login to see the full transcript.

Previous episode | Next episode

Disclaimer: The podcast and artwork embedded on this page are from Harvard Business Review, and are the property of its owner and not affiliated with or endorsed by Tapesearch.

Generated transcripts are the property of Harvard Business Review and are distributed freely under the Fair Use doctrine. Transcripts generated by Tapesearch are not guaranteed to be accurate.