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As the political climate gets tough, companies get careful.
So says a study released Thursday by the nonpartisan Center for Political Accountability, a nonprofit based in Washington, D.C., and the Zicklin Center for Business Ethics Research at the University of Pennsylvania’s Wharton School.
The study found a sizable rise in the number of S&P 500 SPX, +0.28% companies that achieve top scores for political disclosure and accountability.
The jump — from 57 in last year’s study to 73 this year — ranks as the largest year-over-year increase since researchers began in 2015 to give S&P components a rating based on the CPA-Zicklin Index of Corporate Political Disclosure and Accountability. This index scores companies on how well they reveal their policies governing a range of political spending.
“The index indicates that U.S. public companies are acknowledging and taking solid steps to manage the heightened risks from political spending,” said Bruce Freed, president of the Center for Political Accountability, in a news release.
“We saw this in improved company scores and heard it in substantive conversations with 60 companies that contacted us. They’re concerned about protecting themselves from today’s inflamed political climate.”
The 73 companies received index scores of 90% or higher to earn a “Trendsetter” designation from the center. Four companies got scores of 100% — Becton Dickinson & Co. BDX, +0.53% , Edwards Lifesciences Corp. EW, +1.39% , HP Inc. HPQ, +0.00% and Northrop Grumman Corp. NOC, +0.23%
Board oversight of corporate political spending keeps rising.
In addition, the two centers said that the average index score evaluating overall political disclosure and accountability for the 399 companies that have remained constant S&P components since 2015 has continued to rise, hitting 53.3% this year versus 41.6% in 2015.