In case you missed it, I wanted to post an update on the dispute between Qualcomm and the New York state government, which was the subject of a blog post back in December. As a recap, the New York State Comptroller Thomas P. DiNapoli, acting on behalf of public employee retirement funds, had filed a lawsuit against Qualcomm, of which New York state is a shareholder, calling for disclosure about the beneficiaries of its political contributions.
On Friday came news of a settlement in which Qualcomm has decided to update its disclosure policy and release a full list of all beneficiaries of its U.S. political contributions, regardless of their tax status and legal exemptions from being disclosed. Mr. DiNapoli rightfully praised Qualcomm, declaring this action a milestone in corporate transparency.
It is a milestone for several reasons. First, it underscores the real and growing power shareholders—particularly large institutional shareholders—have in changing the management behavior within the corporations they own. Second, it sets a benchmark for disclosure by other U.S. companies which have often been shy to reveal their participation in political matters (as well as around other ESG issues). And third, it circumvents the gridlock, inertia and obfuscation around legislating corporate disclosure in Congress.
While the sunlight of disclosure can be uncomfortable, many believe it can only help improve long term accountability and sustainable performance. With 2013 proxy season upon us, what other shareholder initiatives and innovations can we expect?