Organization: International Business Machines Corp.

Year: 2015

Whereas: Whereas: We believe it is important that IBM's lobbying positions and practices to influence public policy are transparent. Public opinion is skeptical of corporate influence on Congress and public policy. Controversial lobbying activity may pose risks to our company's reputation and to shareholder value. IBM spent approximately $15.65 million in the three year period of 2011-2013 on federal lobbying, according to Senate reports. The company provides little information to shareholders with regard to the identity, supervision of, level of spending, or nature of the lobbying conducted by third parties. This total does not include lobbying expenditures to influence legislation in states. Resolved, the shareholders of IBM request the Board authorize the preparation of a report, updated annually, and disclosing: 1. Company policy and procedures governing lobbying, both direct and indirect lobbying communications. 2. Payments by IBM used for (a) direct or indirect lobbying or (b) grassroots lobbying communications at the local, state and federal levels, in each case including the amount of the payment and the recipient. 3. IBM membership in and payments to any tax-exempt organization that writes and endorses model legislation. 4. Description of the decision making process and oversight by management and the Board for making payments described in sections 2 and 3 above. For purposes of this proposal, 'indirect lobbying' is lobbying engaged in by any trade association or other organization of which IBM is a member. The report shall be presented to the Audit Committee or other relevant oversight committees and posted on IBM's website.

Resolved: Resolved: the shareholders of IBM request the Board authorize the preparation of a report, updated annually, and disclosing: 1. Company policy and procedures governing lobbying, both direct and indirect lobbying communications. 2. Payments by IBM used for (a) direct or indirect lobbying or (b) grassroots lobbying communications at the local, state and federal levels, in each case including the amount of the payment and the recipient. 3. IBM membership in and payments to any tax-exempt organization that writes and endorses model legislation. 4. Description of the decision making process and oversight by management and the Board for making payments described in sections 2 and 3 above. For purposes of this proposal, 'indirect lobbying' is lobbying engaged in by any trade association or other organization of which IBM is a member. The report shall be presented to the Audit Committee or other relevant oversight committees and posted on IBM's website.

Supporting Statement:Supporting Statement: IBM is to be commended for its appropriate disclosure with regard to the political contributions that represent the company's participation in the electoral process. IBM should establish high standards for evaluating and disclosing the extensive spending that represents the company's participation in the legislative process through lobbying. IBM does not disclose its memberships in, or payments to, trade associations, or the portions of such amounts used for lobbying. In contrast, competitors Dell, Microsoft, Xerox and Intel publicly disclose indirect expenditures made by their trade associations. Absent a system of accountability and disclosure, corporate assets may be used for policy objectives that pose risks to the company. For example, IBM has a seat on the board of the US Chamber of Commerce, which has spent over $1 billion member dollars on lobbying since 1998. IBM's level of funding of the Chamber is not available to shareholders. The IBM statement on climate change policy states that 'IBM recognizes climate change is a serious concern that warrants meaningful action on a global basis to stabilize the atmospheric concentration of greenhouse gases (GHGs).' In contrast, the Chamber to which they belong has seemingly prioritized blocking climate change action, including suing the EPA for its advocacy combating climate regulation. It is a logical next step in the interests of transparency for IBM to review its public policy advocacy and oversight and expand its public disclosure with regard to third party lobbying.