More than half of the largest 100 U.S. public companies now disclose their direct political spending and have adopted board oversight mechanisms, according to a new report from the Center for Public Accountability (CPA), a Washington-based group that coordinates shareholder proposals that seek more disclosure.

On Friday, CPA released its report and a new index that ranks companies based on their political spending disclosure on their public Web sites. The group prepared the index with the Zicklin Center for Business Ethics Research at the Wharton School of the University of Pennsylvania. CPA said it plans to update the index annually and will expand it next year to cover the S&P 500.

The index likely will be used as a checklist for shareholder proponents as they file proposals for the spring 2012 proxy season. CPA has organized investor campaigns on this issue since 2003; at that time, very few companies publicly disclosed details about their political activities and policies.

This issue has received more investor and media attention since the U.S. Supreme Court struck down restrictions on indirect political spending by companies in January 2010.  During the spring 2011 proxy season, investors filed 79 proposals (a 40 percent increase from 2010) that related to political activities, while the CPA-coordinated resolutions averaged 33.8 percent support, up from 28.4 percent the previous year, according to ISS data. 

Corporate political spending likely will get even more attention during 2012, a presidential election year. Both Republicans and Democrats have formed independent groups that will be able to influence federal elections without disclosing their donors. 

“As avenues for corporate political money proliferate, the need for greater transparency and accountability on the part of companies increases,” CPA argues in its report. “Companies have a duty to shareholders to ensure that corporate funds are used in ways that advance long-term company interests and enhance shareholder value.” 

In recognition of the growing concern over the risk of corporate political activities, ISS has proposed to revise its benchmark voting policies and would generally recommend “for” resolutions that seek better disclosure, instead of the current “case by case” approach. (For more details on this and other proposed policy changes, please click here.)