At a federal level, political donations over $14,500 must be disclosed each year. Griffiths said some corporations had been found to make multiple donations of $10,000 to evade these requirements, which kept investors in the dark. She said executives also buy $10,000 tickets to political fundraising events to access decision makers, which are rarely disclosed by companies.
“There wouldn’t be a public record of that, which means then there is no opportunity for shareholders to follow that up and ask questions,” she said. “These are the sorts of situations which could happen relatively easily, within the rules, but outside the ethics of a publicly listed company.”
Grattan Institute chief executive Danielle Wood said corporations defend political donations by explaining the payments are made to both parties with the purpose of supporting the democratic process, but in reality the payments give well-resourced companies access to the lawmaking process.
“Whether that’s a good use of shareholders’ money remains to be seen,” she said. “It may be to the extent there is shareholder value, but it’s the type of value that’s not particularly good from a whole of society perspective, where people are having a louder voice in debates because they have the money to afford to.”
Proxy adviser ISS head of research Vas Kolesnikoff said companies with close relationships to government can create shareholder value, providing the example of Wesfarmers which kept Bunnings stores open during the pandemic.
However, Kolesnikoff said these companies have access to politicians regardless of whether they donate. “The small donations are small – it’s to keep the finger in the pie. But it’s more a governance issue because this is shareholder money.”
Corporate governance expert Helen Bird said political donations are often small and not market sensitive, meaning there was no obligation on ASX-listed companies to disclose payments beyond the AEC requirements.
Loading
Bird, a senior lecturer of governance studies at Swinburne Law School, said corporates give money to a range of political bodies, including individual politicians, parties and lobby groups, to “buy favour” within government. “You give money to various lobby groups, they get you a meeting with the minister or relevant body.”
A parliamentary inquiry launched in 2017 made a number of recommendations to reduce the potential for political donations to weigh on government integrity, including reducing the disclosure threshold to $1000, requiring continuous, real-time reporting of donations, introducing a cap on donations and banning foreign donations.
Bird agreed there needs to be more frequent disclosure of donations because delays made it difficult to “connect the dots” between payments and influence. She said the mining industry had for years pursued an aggressive government relations approach to minimise taxation and environmental, social and governance (ESG) regulations.
“What has gone completely under-noticed was the Prime Minister was in Western Australia last week announcing no new charges or taxes on mining companies and a reduction in compliance requirements for carbon emissions,” Bird said. “That’s one where you think – how did that happen? We’ve just agreed to [net zero by] 2050 and already we’re backing away from making changes in regulation.”
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
