Regulating Political Donations by Companies: Challenges and Misconceptions

This paper analyses the regulation of company political donations in the UK. It argues that UK policy makers have failed to understand the nature of company donors and, consequently, that the UK Companies Act 2006 requirement for shareholder consent for company donations is not an effective solution to concerns about company donors. To this end, the paper presents a comprehensive empirical analysis of company donations to show that the vast majority of donor companies are closely held or owner‐managed entities where shareholder consent rules are ineffective. The paper highlights particular concerns that arise with donation by such companies and argues for a more accurate understanding of company donations in order to formulate effective policy responses to concerns about the role of company donors.