How Fiduciary Duty Applies to Political Influence

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On July 22, 2021, we spoke with Rick Alexander and Sara Murphy of The Shareholder Commons to explore “Why Diversified Shareholders Must Mobilize to Ensure ESG Includes Corporate Political Responsibility (CPR).”

Boards, executives and investment managers are working to address evolving shareholder interest in environmental, social and governance issues. Yet few have yet focused on the particular interest that “universal owners” -- large institutional investors with diversified portfolios that have a financial interest in the well-being of the economy as a whole -- in greater corporate political responsibility.

In this module, we explore:

• How does fiduciary duty apply to corporate political influence strategies that are calculated to increase a company’s financial return?

The Corporate Political Responsibility Taskforce (CPRT)’s Expert Dialogues are in-depth, recorded conversations with academic experts, stakeholder advocates and business practitioners to provide our members and other CPR champions with the expertise and context they need to develop principled, proactive CPR strategies. Specifically crafted as conversation-starters for business students, government affairs officers, sustainability executives, diversity, equity and inclusion leaders, investors, academic experts, and stakeholder advocates, each module is designed to spark constructive, non-partisan, principles-based dialogue without “being political.”

The Shareholder Commons is tackling capital system failures that are endangering our common future. By harnessing the power of universal owners—large institutional investors with diversified portfolios that have a financial interest in the well-being of the economy as a whole—TSC works to ensure our capital markets give priority to long term systemic health over individual company profits, in ways that enable all managers to operate at a base level of responsibility without having to individually balance profit and social cost.

Keywords: #CPAShortTermism #CPRLong-termShareholderValue #CPAMarketFailures #CPRLong-termShareholderValue #CPAShortTermism