By Eleanor Bloxham
May 8, 2012

FORTUNE — This year marks the first presidential election year since the January 2010 Supreme Court decision Citizens United, which opened the floodgates on corporate political spending. So it’s not too surprising that oversight and disclosure of these practices have been hot topics in U.S. boardrooms both this year and last year.

Late last year, the first Zicklin-Center for Political Accountability Index was published, ranking U.S. companies on their political spending disclosures. And this year, in the run up to corporate annual meetings, shareholders and major U.S. companies have been meeting behind the scenes to discuss improvements in oversight and disclosure practices. “Companies need to remember that shareholders have a right to know how their money is being spent,” wrote Eric Sumberg, spokesperson for New York State Comptroller Thomas P. DiNapoli, representing the New York State pension fund, in an email. “Transparency and full disclosure will help to deter high risk political spending that could hurt shareholder value.”

Aetna and WellPoint are two companies contending with shareholder proposals on political spending disclosure this year.

The Center for Public Accountability (CPA) rates the disclosures at Aetna and WellPoint as having “room for improvement.” Both WellPoint and Aetna have disclosure practices that “leave significant room for serious misrepresentation of the company’s political spending through trade associations,” according to the Center’s Political Accountability and Transparency Reports. According to the Center reports, both companies gave money to AHIP (American Health Insurance Plans). And $86 million in funds from AHIP were allegedly funneled to the Chamber of Commerce to lobby against health care reform, according to reports from Bloomberg and the National Journal.

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But both Aetna and WellPoint oppose the shareholder disclosure resolutions. An Aetna spokesperson wrote in an email to me, “we agree transparency and accountability with respect to political expenditures are important [and] … we also believe the information currently available to shareholders is easily accessible and understandable.” In its proxy, WellPoint argues against the disclosure proposal, saying that the company already provides “significant disclosure of our corporate political contributions, expenditures and activities.” In an email, a WellPoint spokesperson wrote that the company’s “political activities are overseen by our Board and management and are an important part of our corporate strategy.”

Unlike Aetna, however, health insurance giant WellPoint — which will hold its annual shareholders meeting next week — is not only facing a shareholder proposal to improve its disclosure practices, but board members standing for reelection are facing a no vote campaign.

The Nathan Cummings Foundation, for one, plans to vote against all four directors up for election, because of “gaps in the company’s disclosure of its political spending, the company’s apparent backtracking on a prior agreement … and [board member] conflicts of interest,” Laura Campos, director of shareholder activities, wrote in an email.

The backtracking Campos refers has to do with a contention among some shareholders that WellPoint reneged on an agreement with a nun.

Sister Valerie Heinonen, director of shareholder advocacy at Mercy Investments, originally got involved with political disclosure issues with Aetna and WellPoint, “back in 2006 during the Bush administration,” she told me. Her description of the experiences is a study in contrasts. With Aetna, she worked directly with the insurance company’s Washington office and they did an “excellent job,” she says. But with WellPoint, they had her work with an outside law firm who “did just what was necessary.” In 2007, Heinonen struck an agreement with WellPoint on the disclosure of its political spending practices, but she now feels that there are gaps that need filling.

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Heinonen wrote in an email that her fund plans to vote against WellPoint’s directors because they “did not think it important to disclose [lobbying] connections to investors, or, perhaps never read the policy.”

Shareholders generally consider no votes against directors as a method of last resort, when they believe they have exhausted all other means to sway the board to change.

Change to Win Investments’ senior governance policy analyst Michael Pryce-Jones says that WellPoint has been unresponsive to queries regarding millions that the company, along with other health insurers, gave to AHIP (American Health Insurance Plans). Change to Win believes WellPoint’s board members are conflicted and supports no votes on two of the four WellPoint directors up for election this year.

Proxy advisors Glass Lewis and ISS are not supporting the shareholder disclosure proposals at Aetna and WellPoint. They are also not supporting the campaign against the directors at WellPoint. Glass Lewis does encourage improved disclosure at WellPoint to avoid “potential negative repercussions” associated with AHIP-like expenditures and ISS recommends monitoring WellPoint’s practices.  Regarding the potential conflict of having Susan Bayh, wife of former Democratic U.S. senator from Indiana, on WellPoint’s board, “ISS expects to see enhanced disclosure of the steps taken (including recusal, if necessary) to address conflicts that may arise from direct or indirect financial benefits to members of her family that could flow from the company’s ongoing political spending activities.”

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Without ISS and Glass Lewis support, the vote against the directors at WellPoint faces an uphill battle. But political spending concerns are unlikely to go away. The “no vote campaign” this year — whether it succeeds or fails — raises the stakes and puts other companies on notice.

Companies that ignore shareholder requests for information or fail to disclose run the risk of an escalation in complaints over time. Beyond spending disclosures, boards also need to ensure they fully disclose director and executive relationships that could pose conflicts with respect to political spending. Boards should also avoid perceptions of conflict that could erode shareholder and public trust. That said, being pleasant doesn’t hurt, either.

Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance (, a board advisory firm.

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