The Harvard Law School Program on Corporate Governance recently issued our discussion paper, “Corporate Political Speech: Who Decides?” The paper will be published in the Harvard Law Review’s Supreme Court issue this November.

As long as corporations have the freedom to engage in political spending — a freedom expanded by the Supreme Court’s recent decision in Citizens United v. FEC — the law will have to provide rules governing how corporations decide to exercise that freedom. Our paper focuses on what rules should govern public corporations’ decisions to spend corporate funds on politics. The paper is dedicated to Professor Victor Brudney, who long ago anticipated the significance of corporate law rules for regulating corporate speech.

Under existing corporate-law rules, corporate political speech decisions are subject to the same rules as ordinary business decisions. Consequently, political speech decisions can be made without input from shareholders, a role for independent directors, or detailed disclosure — the safeguards that corporate law rules establish for special corporate decisions. We argue that the interests of directors and executives may significantly diverge from those of shareholders with respect to political speech decisions, and that these decisions may carry special expressive significance from shareholders. Accordingly, we suggest, political speech decisions are fundamentally different from, and should not be subject to the same rules as, ordinary business decisions.

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