Target is running into yet another backlash as a result of its $150,000 donation to a business group supporting Republican Tom Emmer in the Minnesota gubernatorial race. And as the Los Angeles Times reports, this time it’s not from liberal activists and pro-gay rights consumers in Target’s deep-blue home state — it’s from shareholders, who are worried about the damage the flap has done to the company itself.
Target shareholders are demanding that the retail giant review and revamp its political donation process — to avoid embarrassment and bad press in the future.As the Times reports:
“Imprudent donations can potentially have a major negative impact on company reputations and business if they don’t carefully and fully assess a candidate’s positions,” said Tim Smith, a senior vice president at Walden Asset Management, one of three asset management firms that this week filed a resolution asking the retail giant to overhaul its campaign donation policies. He cautioned that funding ballot initiatives, as many corporations have done, “can similarly backfire.”
The three management firms sponsoring the resolution — Calvert Asset Management, Trillium Asset Management and Walden — together hold $57.5 million of Target stock. Other institutional investors, including the giant New York state pension fund and union investment managers, are considering co-signing the resolution, which calls on Target’s independent directors to review the criteria and risks in making donations to organizations active in political campaigns.
“A good corporate political contribution policy should prevent the kind of debacle Target and Best Buy walked into,” said Shelley Alpern, director of shareholder advocacy for Trillium Management. “We expect companies to evaluate candidates based upon the range of their positions — not simply one area — and assess whether they are in alignment with their core values. But these companies’ policies are clearly lacking that.”
As we’ve posted before, Target’s involvement with the business group MN Forward, to which Target donated $150,000, triggered a political backlash in this liberal state due to Emmer’s right-wing social positions. The company said it was supporting MN Forward (and by extension Emmer) because of economic issues — and also touted its own positive corporate policies on gay rights — but the matter has caused enough controversy that the CEO has apologized.
The whole Target saga has revealed a wrinkle in the post-Citizens United world. Corporations have greater latitude to donate to political causes and candidates as a result of the Supreme Court’s decision. But at the same time, they face the pitfalls of being associated with all of a candidate’s positions — not simply the ones that attracted their support.
Also, as I’ve previously argued, the donations to Emmer could damage shareholder value in yet another, much simpler way. The TPM Poll Average currently has Democratic nominee Mark Dayton leading Emmer and the Independence Party’s Tom Horner by 44.2%-33.6%-9.9%. In other words, donations to help out Emmer might not just be political quagmires — they could be a waste of money, too.
Another fun fact in all of this: Target’s previous name and corporation incarnation was as the Dayton-Hudson company — the century-old family business of Dem nominee Mark Dayton.