[EL] Revelation: Disclosure May Not Be In Shareholders' Interests

[bzall at aol.com]

Former SEC          Commissioner: Political Disclosure Not Always in Shareholders’          Interests      
      
        Posted on February 4, 2013 7:42            am by Rick Hasen 
      
        
Woah:
        
          



Seriously? This is a surprise?


That shareholders rarely care about the political agenda of those who promote disclosure for the sole purpose of altering corporate behavior? And that the end goals of those who seek to change corporate behavior is NOT the maximization of shareholder value, but some other interest thought to be of more societal or collective merit? And that, in light of the increasing number of proposals for shareholder actions to disclose association membership or other customary business activities, the Nat'l Association of Corporate Directors, whose members are held to a high standard of maximizing shareholder value, might want to be reminded that there is a disconnect between the vision of the disclosure proponents and the reality of the marketplace? And that the disconnect is greatest in understanding the business effect of the non-market-based disclosure (as if they didn't already by the public evisceration of Target and the backlash against the attacks on Chik-fil-A). 


The whole "disclosure" movement is based on the idea that a corporation shouldn't be making these (non-material) expenditures because they'll have a negative effect on the business; but the movement usually doesn't realize that their argument is really a two-edged sword to those who do not share the same vision (and may be subject to legal duties not shared by the movement's advocates). 


Kind of like saying "we had to destroy the village to save it."


Perhaps a better way would be to educate the corporate executives about the individual organizations to which they might give, rather than simply mandating disclosure. It's difficult and frustrating to allow people to make up their own minds based on information you provide to them, but command-and-control is always more efficient than education and understanding, even if less effective. Now imagine which of those two strategies is currently the foundation for public corporation law? 



Barnaby Zall 
Of Counsel 
Weinberg, Jacobs & Tolani, LLP 
10411 Motor City Drive, Suite 500
Bethesda, MD 20817
301-231-6943 (direct dial) 
bzall at aol.com 
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