Corporation Generally Agrees With ACSR's Memo to SEC

The Corporation Subcommittee on Shareholder Responsibility has expressed "general agreement" with a proposal that would force corporations to disclose publicity their political contributions and progress in equal employment hiring.

The proposal to reform the U.S. Securities and Exchanges Commission rules on corporate disclosure--made by the Advisory Committee on Shareholder Responsibility (ASCR) in April--also would require corporations to disclose, at shareholder request, the environmental impact of their activities.

The Corporation subcommittee stopped short of fully endorsing the ACSR's proposals, however, expressing only "general agreement" in a letter to the SEC, released last Friday.

In the one-page letter, the Corporation subcommittee added that "we do not feel able to evaluate the...considerations which should be taken into account in prescribing the extent and manner of required disclosures."

Sabino Rodriguez III '74-4, a student member of the ACSR, said Friday that the Corporation subcommittee was limited to substantive agreement with the ACSR proposal because the ACSR's "did the work of researching and mulling over" the issue of corporate disclosure.

Hugh Calkins '45, chairman of the four-member Corporation subcommittee wrote the letter of the SEC--which was approved by the entire committee on May 27--following the committee's decision early last month to "substnially endorse" the ACSR's proposal.

Under the ACSR proposal--contained in a three-page memo which the Corporation subcommittee will sent to the SEC--corporations would have to summarize their equal employment hiring trends and list their political contributions in annual reports.

The ACSR proposal would also force corporations to make available to shareholders formerly confidential environmental impact statements.

Corporations now do not have to disclose publicity any information of this type with the exception of contributions to candidates for federal office and contributions to candidates in states which have disclosure laws.

In its letter to the SEC the Corporation subcommittee stressed the limited nature of the reforms and applauded the ACSR's endorsement of required disclosure on a limited number of issues.

Members of the ACSR have said previously that the committee recommended disclosure only on issue which have been the focus of "major national legislation," such as equal employment hiring, political contributions and environmental protection.

In its memo containing the proposals for reform, the ACSR stressed that rules requiring more disclosure would aid in "investor knowledge," and did not address the possibility that required disclosure of information might force corporations to change policy.

Members of the ACSR have said that the SEC is only legally able to implement disclosure reforms because of improved investor information, and that the ACSR memo emphasized this virtue of its proposed reforms.

But the members of the committee added that improved disclosure should be supported because it might "shame" corporations into implementing reforms.

The SEC has completed its hearings on disclosure reform, and will announce its decision on the issue in several months