Citizens United: U.S. Supreme Court decision

Last month’s U.S. Supreme Court decision in the Citizens United case has given corporate management considerable latitude to use corporate funds in political campaigns. Many are concerned that corporate political spending often influences public policy in ways that harm the public interest. So the individual investor advocacy organization ShareOwners.org has launched a campaign to reduce the potentially harmful effects of corporate money on politics. ShareOwners.org is focusing on disclosure of political spending, and using investors’ voice to restrain management abuse of this power — details in the ShareOwners.org press release and this SocialFunds.com article.

I applaud the ShareOwners.org initiative, and would like to suggest an additional strategy. The voter funded media (VFM) system is designed to help us voters use our power in corporations (where we own shares) and democracies (where we are voting citizens) so as to serve our interests, which are generally close to the broad public interest. An important reason why corporate political spending can fool us into voting for politicians who do not serve the public interest, is that we lack well-funded media loyal to the public interest. Letting voters allocate public funds to competing media would fill this gap, thus undercutting the influence of campaigns that try to fool us.

Similarly, VFM applied to corporations would help us shareowners keep management accountable to our interests, e.g. ensuring that they do not spend our corporation’s funds on political campaigns that harm us. To see why management’s political interests diverge from ours, see pages 98-99 of “Democracy and Infomediaries” at votermedia.org/publications.

Thus I recommend supporting the spread of voter funded media implementations in democracies (e.g. votermedia.org/communities/82-ubc-ams) and corporations (e.g. Proxy Advisor proposals), as well as for investor education.

Comments to FCC on the Future of Media

I posted this on the VoterMedia Democracy Blog on January 25, but it may be of interest to readers of this blog too:

Four days ago, the U.S. Federal Communications Commission announced their request for comments on “the future of media and the information needs of communities in a digital age”, along with 42 specific questions. I submitted my comments this morning, which are already linked on the FCC website page for “Proceeding 10-25”. I’ve also posted these links at votermedia.org/publications.

Mainly I pitched the benefits of voter funded media, with the UBC Continuous VFM competition as an example.

Giving talks at Stanford & Berkeley

I’ve recently scheduled to give these three talks:

Nov. 16 at Stanford Law School’s Rock Center for Corporate Governance, mainly on the paper “Proxy Voting Brand Competition”, my work on the SEC Investor Advisory Committee, and ProxyDemocracy.

Nov. 17 at U C Berkeley’s Institute of Governmental Studies, mainly on the paper “Global Voter Media Platform” and VoterMedia.org.

Dec. 10 at the 2009 British Columbia Pension Forum, mainly on the paper “Proxy Voting Brand Competition”, my work on the SEC Investor Advisory Committee, and ProxyDemocracy.

More info on the talks at votermedia.org/presentations. The papers are available at votermedia.org/publications.

Vote to allocate investor education budget

I write two blogs, and their topics overlap somewhat. (The other is VoterMedia Democracy Blog.) This post is an example of that overlap.

Both blogs relate to the website VoterMedia.org, which is a political reform project that focuses on the economics of information that flows to voters, in corporations and in democracies.

I propose that voters in each community (corporation, city, country, labor union etc) vote to allocate a budget among competing information providers. These would be something like proxy advisors for corporate shareowners, and political media & think tanks for democracies. For smaller voter communities like student unions, the advisor/info role would often be filled by bloggers.

I first proposed this for corporations in 1988, and published it in 1997 (and later) — see votermedia.org/publications. I submitted it as a shareowner proposal many times, some of which are listed at votermedia.org/proposals. Management of course opposed it, but I was disappointed in the lack of support from institutional investors.

So I expanded my scope to democracies, wrote some papers about how to apply the idea there, and sponsored several test implementations in the last few years, especially at the University of British Columbia’s student union and in Vancouver city politics. I explain the idea and test results in the paper Global Voter Media Platform, along with a plan for the website which we are now building. See also our FAQ page.

Thinking about the issues we are facing in the SEC Investor Advisory Committee, I found myself reacting to the problems of disclosure requirements, especially disclosure to retail investors, e.g. when buying mutual funds. It’s so hard to control the behavior of people who make money from investors. But a well-designed investor information/education system should be able to effectively empower individuals to make better investment decisions.

The economics of such an information system are similar to the economics of voter information systems. There’s a large shared public interest component of such a system, which private markets do not fulfill very well. But allocation and oversight of public funding is often inefficient and ineffective, so we end up with poor information systems. The voter funding allocation system I’ve proposed could be applied to investor education too.

So I recently added a page for that to our new website — see votermedia.org/communities/223-usa-investor-ed. For now, the whole website is in public test mode. There’s no funding yet. Anyone can vote, with or without a login. So far I’ve just told a few colleagues about this new page, so the votes are too heavily weighted toward Proxy Democracy (where I’m on the board). Feel free to vote and tell others, to balance this out! (Also see example pages for Vancouver and UBC.)