Execs can blame any bout of insomnia on the current election, as wildly divergent candidates may impact the business landscape in radically different ways. Yet finance leaders know that long before Election Day many companies are already feeling the effects of election mania. That’s because investors are now pressing more companies to disclose political donations and spending policies—less in an effort to curb that spending than to trace how it aligns with the company’s overall strategy.
4 need-to-know headlines
1. Investors push for contribution disclosures this election season
Does your company share how much it spends on politicians, charitable causes, and trade groups? While regulators don’t require such transparency, more companies are making these types of disclosures thanks to a groundswell of investor pressure. More than 100 such resolutions have been presented to large U.S. companies or are currently in the works, according to ISS Voting Analytics. The pressure seems to be less about cinching the corporate purse strings and more about transparency. “What we are asking for in disclosure is that a company be upfront and explain why such spending is important,” said one director of share owner engagement. (via WSJ.com [log-in required])
2. Eyebrow-raising expense reports on the rise
From cigars to cosmetic surgery, taxidermy to toilet paper, unusual reimbursement requests are increasing across all types of teams, according to a survey by Robert Half Management Resources. Nearly one-fourth of CFOs reported an increase in such requests over the past three years. To fight back, finance teams should take a fine-tooth comb to expense policies to clear up any confusion (or wiggle room), the survey managers noted. (via Financialpost.com and Bizjournals.com)
3. Treasury puts inversions in the crosshairs
For multinational corporations, a different tax address can mean millions saved or spent in tax liability. That’s prompted some to rely on inversions, in which a U.S. company acquires a smaller foreign company in order to get a lower tax rate abroad. But this week the Treasury Department announced new rules that could seriously curtail the practice, along with prohibitions against so-called serial inversions and earnings stripping. (via Nytimes.com)
4. Sizing up risks, more CFOs want Britain to stay put
Three-fourths of CFOs at the U.K.’s largest companies are now in favor of Britain remaining part of the European Union, up from 62 percent at the end of last year, according to a recent survey. In fact, a “Brexit,” as the possible departure has been widely dubbed, now tops the list of biggest risks to local businesses, beating out fears of weak consumer demand, higher interest rates, or economic weakness in the Euro area. (via Forbes.com)
The stat: 56%
That’s the percent of North American companies that hired outside firms to conduct at least part of their internal audits, a survey by the Institute of Internal Auditors found. An uptick in regulation and investor pressure for more disclosure has some companies applying greater scrutiny to their books. But when finance teams are stretched too thin, external auditors are increasingly filling the gap. (via WSJ.com [log-in required])
Sound bite of the week
“It is not a time of crisis, but a different reality. It presents threats but it also presents significant opportunities.” —Vsevolod Rozanov, CFO of Sistema, commenting on the near future finance leaders face. While panic about the global outlook seems pervasive in economic circles, many finance chiefs are demonstrating a flexible, level-headed approach to meeting company goals. (via CFO.com)
4 Top Stories + 1 Key Statistic + 1 Industry Quote = The CFO 411
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