Getting Ahead of Regulations

The Conference Board has issued a report recommending that compensation practices be tied to performance, not be excessive, be more transparent and be free of controversial pay practices - such as overly generous golden parachute provisions. While it's easy to dismiss reports like this as puffery, the guidelines are specific and sometimes provocative. According to the Los Angeles Times, companies are hoping to avoid mandatory compensation caps (favored by some European nations), or other regulations that could weaken the authority of corporate boards.  

For some corporations, this approach could also be part of an investor relations strategy. Tech companies have taken a leadership role on the executive pay issue, says MarketWatch, partly to appeal to institutional investors that have been critical of compensation practices.

Shareholder Pressure on Policy

Recent departures from the U.S. Chamber of Commerce because of its stance on climate change have made the news in recent weeks. It's certainly not the first time the nation's largest business organization has faced internal disagreement on public policy. What's different this time around is that activist shareholders are trying to put pressure on companies to leave the Chamber, reports Roll Call. Walden Asset Management and Green Century Funds, among others, have encouraged Nike to resign after it recently stepped off the board because of the issue.

Leading the charge is the Center for Political Accountability, which has contacted members of the Chamber, NAM and other business groups to demand greater disclosure about public policy positions that don't match those of their associations. The Center is also the chief advocate of standards for the disclosure of political spending by corporations.

Adding Injury to Insult

The Obama administration's new policy limiting the participation of registered lobbyists on federal advisory committees has been described by the White House as "the next step" in the president's efforts to reduce influence-peddling in D.C., reports Roll Call.

First, there was the campaign promise to keep lobbyists out of the administration. Then there was the presidential memorandum (later modified) restricting lobbyists from meeting with federal officials about economic stimulus projects. Both steps upset registered lobbyists working for clients ranging from corporations to universities, local governments, labor unions and public interest groups.

The latest anti-lobbying action has offended a wide range of people who have been lending their expertise to government on important subjects such as trade policy. According to Inside U.S. Trade, the trade advisory system, which is run by the USTR and the Commerce Department, consists of 28 advisory committees containing hundreds of individual advisers. Apparently, about 30 percent of those advisers are federally registered lobbyists.

Nationaljournal.com quotes a letter of appeal from William Lane, a lobbyist for Caterpillar, who noted that Industry Trade Advisory Committee (ITAC) members hold security clearances and serve at their own expense, plus they provide valuable advice that can help to "open foreign markets, promote U.S. competitiveness and encourage economic growth."

Norm Eisen, Obama's special counsel for ethics, claims in a post on the White House blog that this action builds on the president's commitment to bar lobbyists from federal service. What's interesting is that he never acknowledges that the input from these advisers might actually be useful to the nation.

Clearly there are many organizations - particularly small trade groups - that will suffer because they will be out of the loop when policies are formulated, reports The Hill. But I'm betting that the greatest injury will be experienced by those at USTR and Commerce, who will be unable to find people with the same expertise on their advisory panels.