While we cannot find fault with philanthropic activity of public corporations in Israel, it must be done with complete transparency. The demand for transparency assumes even greater urgency when one considers that the largest leveraged public corporations donate huge sums to certain rabbis and their religious institutions.
As Sharon Shpurer revealed (Haaretz, August 17, Hebrew), the IDB Foundation, whose capital is based on a group of public corporations controlled by Nochi Dankner, donated some NIS 4 million to various institutes connected to Rabbi Yaakov Ifergan between 2005-2010. Dankner also donated considerable sums to Rabbi Yoshiyahu Pinto, as did Ilan Ben Dov, from the funds of public firms he controls. Often, these donations were made by public companies even as the firms were facing financial turmoil.
Public corporations are obligated to report any information that might be considered "essential." The question must be asked, though: What is "essential" information? The Israel Securities Authority uses a quantitative measure. It claims that relative to their vast wealth and financial activities, the sums that Dankner or Ben Dov donated were too small to be considered worthy of being reported. The authority demands that companies detail their donation policies, but does not demand a breakdown of each and every donation. This is a mistake.
Investors have a clear interest in knowing who received donations from public corporations. Transparency is necessary, since not every investor wants to see his money transferred to the corporation chief's preferred rabbi. There are also investors that are interested in donating to one particular ultra-Orthodox charity but not to another. Only a detailed breakdown of donations will give investors the necessary information so that they can decide where to invest.
Furthermore, there is the fundamental question of whether public corporations should even be making donations merely according to the personal proclivities of their CEOs. Such donations are often used to legitimize improper business activities, or for the promotion of company controllers. In recent years the Securities Authority has expanded corporations' obligations for transparency, as in the case of reporting matters concerning the environment. Donations should be revealed in exactly the same manner.
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