Call for clarity on companies' political involvement.

Businesses must make their political activities more transparent to prevent any accusation of skulduggery, according to a report by the the Institute of Business Ethics.

Heightened public scrutiny of corporate donations has reduced the total amount of money given to political parties. As a result, the emphasis has shifted to lobbying, so firms must ensure that they're open about their political aims and activities, the report states.

Its author, David Lascelles, argues that lobbying should have its own set of company policies, rather than a patchwork assembled from general principles. He believes that firms wanting to make political donations should obtain investor approval for both policy and donation budgets. They should also explain how and why they are deciding to make donations.

Many companies do not have policies or codes of conduct for political lobbying, according to the report's sponsor, F&C Asset Management. "We are aware of more than a few cases where the left hand doesn't know what the right hand is doing," said Karina Litvack, F&C's head of governance and socially responsible investment. "More transparency and tighter controls will inject much-needed discipline, as well as boost public trust."