NZ Shareholders Members Area

NZSA Policy Statements

Political Donations

Background

In New Zealand, the need for separation of the democratic process from business and other special-interest activity has been recognised by the introduction of a system of public funding of political parties.

As a general principle, companies must operate within the legal and regulatory system applying in the places in which they operate. Theirs is an economic role - not a political one.

If companies make a decision to make donations to political parties, they reduce the profits available for distribution to shareholders.

In addition, many shareholders may hold opposing views to those being promoted by political groups that receive company donations. Such donations by the company effectively allow management or directors to intrude upon the democratic prerogatives of shareholders.

It is legitimate for companies to attempt to influence government through lobbying and similar representational processes, but provision of funds to political parties or individual politicians taints the democratic process by creating expectations of favours in return.

The NZSA Position

  1. A contribution by public companies to political entities is inappropriate use of shareholders' funds. The NZSA opposes political donations.
  2. Should a donations or contribution of a political nature be made, it should be disclosed and fully explained in the annual report. Where they have occurred, there should be an agenda item on the AGM notice to allow for discussion of the matter.
  3. Nothing in this policy prevents directors or company executives making personal political donations or expressing personal political views outside the context of the position they occupy in the company. This is their unassailable democratic right.