Elevance Health Inc. | Require Trade Associations to Disclose Political Contributions

Status
AGM passed
AGM date
Previous AGM date
Resolution details
Company ticker
ELV
Lead filer
Nathan Cummings Foundation
Resolution ask
Adopt or amend a policy
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Health Care
Company HQ country
United States
Resolved clause
RESOLVED:   The shareholders of Elevance Health, Inc. (“Elevance” or “Company”) ask the Company to adopt a policy requiring that any trade association, social welfare organization, or organization organized and operated primarily to engage in political activities that seeks financial support from Elevance agree to report to Elevance, at least annually, the organization’s expenditures for political activities, including the amount spent and the recipient, and that each such report be posted on Elevance’s website.
For purposes of this proposal, “political activities” are (i) influencing or attempting to influence the selection, nomination, election, or appointment of any individual to a public office; or (ii) supporting a party, committee, association, fund, or other organization organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures to engage in the activities described in (i).
Supporting statement
Supporting Statement
As long-term Elevance shareholders we support transparency and accountability in corporate electoral spending, including the indirect political spending that is the subject of this proposal.  Misaligned or non-transparent funding creates reputational risk that can harm shareholder value. It can also place a company in legal jeopardy. Unless a company knows which candidates and political causes its funds ultimately support, it cannot assure shareholders, employees, or other stakeholders that its spending aligns with core values, business objectives, and policy positions.  Without the information requested by this resolution, none of the board, senior management, or shareowners can assess the risks associated with political spending.
The risks are especially serious when giving to trade associations, Super PACs, 527 committees, and “social welfare” organizations – groups that routinely pass money to or spend on behalf of candidates and political causes that a company might not otherwise wish to support.  The Conference Board’s 2021 “Under a Microscope” report[1] details these risks, discusses how to effectively manage them, and recommends the process suggested in this proposal.
Media coverage has amplified the risk a company’s blind spending can pose. Corporate spending has been tied to attacks on voting rights and efforts to deny climate change – associations many companies wish to avoid. Contributions to third-party groups can also embroil companies in scandal. For instance, FirstEnergy Corp was tainted when it contributed to a political advocacy organization that later pled guilty to the state’s largest bribery scheme. FirstEnergy’s stock price dropped, and the scandal led to the resignation of several top officers.    
Public records show that the corporation currently known as Elevance has contributed at least $12.7 million in corporate funds to third-party groups since 2010. It is unclear whether Elevance and its board received sufficient information from these groups to assess (a) the potential risks for the Company and stockholders, and (b) whether the groups’ expenditures aligned with Elevance’s core values, business objectives, and policy positions. 
Mandating reports from third-party groups receiving Elevance’s political money would demonstrate the Company’s commitment to robust risk management and responsible civic engagement.
We urge a vote FOR the commonsense risk management measures contained in this proposal.
[1] https://www.conference-board.org/topics/corporate-political-activity/Under-a-Microscope-A-New-Era-of-Scrutiny-for-Corporate-Political-Activity

How other organisations have declared their voting intentions

Organisation name Declared voting intentions Rationale
Anima Sgr Against As it should be the ultimate decision of the Board to oversee and manage any potential risks related to the company’s third-party memberships.
It is unclear what control the company has over the disclosure practices of its political partnerships. If a third-party association refused to provide the information requested in the proposal, such a policy may require the company to cut off its membership with relevant organizations. Management and the board should have the discretion to decide on the company’s trade association memberships and their related risks. The company would have no guarantee that the organization is providing accurate data, which could create further risks. Interested shareholders may wish to engage the company about its own direct and indirect lobbying disclosures, but it should be the ultimate decision of the board to justify and decide on the company's third-party affiliation, having regard to the best interests of the company and its shareholders in the knowledge of all facts available regarding the activities of the industry associations and benefits to the company.

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