In days of pandemic, social unrest, global warming, ESG and demands for social justice, companies are finely attuned to their public relations image. Both through direct advertising and the usual output during proxy season, companies try to find the right thing to say in meeting public expectations on key issues.

A recent survey from the Center for Political Accountability examined corporate political spending through so-called “527 non-profit organizations” and found that the money does not always support professed corporate policies. This may be a reflection of lack of rigor in supervising the donations for compliance; hopefully, it is not a conscious effort to divert attention from what a company actually intends to support by putting forth false statements of belief.

Some recent academic suggestions, that boards conduct scenario playing to evaluate risk and consider mitigation responses in cases of failure to put their money where their PR indicates, seem too granular (boards should obey the maxim of “noses in, hands out” of company business). But, given reputational risk in the current environment, it does seem to me that as part of risk management a board should inquire about the mechanism that management applies to monitor political spends for consistency with public policy.