The CPA-Zicklin Index, which ranks companies’ political disclosure practices, has issued a new
report ranking companies in the Russell 1000 Index. This is a significant expansion of the Index,
which previously only covered companies from the S&P 500. The expansion will impact many
public companies that have not previously been subject to scrutiny by political disclosure
activists.

The annual CPA-Zicklin Index is a report jointly issued by the Center for Political
Accountability—a non-profit group promoting corporate political spending disclosure—and the
Zicklin Center for Business Ethics Research at the Wharton School of the University of
Pennsylvania. The report ranks companies based on political spending scores, according to a
metric created by CPA and the Zicklin Center. Companies receive up to 70 raw points across 24
indicators based on disclosures reflected on their corporate websites. The Index considers the
company’s political spending practices and whether it itemizes political expenditures, such as
payments to trade associations and 501(c)(4) social welfare organizations.

With the newfound scrutiny, companies, particularly those in the Russell 1000, should carefully
weigh how they respond to the CPA-Zicklin Index and other disclosure initiatives. Companies
can receive points on the CPA-Zicklin Index scoring indicators in many different ways, and
some options are easier for companies to comply with than others.

Covington regularly advises public companies regarding corporate political disclosure issues,
including strategies for responding to shareholder groups and other corporate political
disclosure activists.