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Prof. Dr. Ludger Heidbrink on Why Companies Should Care about the Democratic System

Updated: Nov 28, 2023

Professor Ludger Heidbrink teaches Practical Philosophy at the University of Kiel. He specializes in business and consumer ethics. Professor Heidbrink is the director of the Kiel Center for Philosophy, Politics and Economics (KCPPE) and a board member at Wertekommission, an initiative for ethical management.

The German NGO Wertekommission asked business leaders about their attitudes towards corporate political engagement. Which are the key findings in your eyes?

There were three main takeaways. First, less than half of respondents were aware of the United Nations Sustainable Development Goals (SDGs). Similarly, only about 50% of business leaders said they would consider making political statements. The rest rejected political intervention owing to concerns about potential reputational damage and social media backlash. Finally, we showed them the CSR pyramid by Archie B. Carroll, which ranks different facets of corporate responsibility in order of priority (economic, legal, ethical, philanthropic), and asked them to locate a putative political element in this structure. Respondents assigned it the lowest importance.

There have nonetheless been increased expectations from the public that companies take their political responsibility seriously.

There are several factors at work here. Companies are often viewed as “public enemies” of sorts whose behavior should be monitored. Additionally, the idea that companies should only look after economic matters has gradually expanded to include societal concerns. What is more, the majority of companies are now transnational players and thus carry considerable financial and political clout.

What would you say differentiates Corporate Political Responsibility (CPR) from existing concepts such as CSR?

The central characteristic of CPR is that it encourages companies to assume responsibility for the preservation of the democratic system with stabilization and risk prevention as particular points of emphasis. CPR goes beyond CSR because it recognizes that companies must help to solve global crises. However, it may take some time for them to see returns on this investment, which is why many companies are still reluctant to view CPR as a business case. The skepticism towards “political” investment stems from a deficit in political know-how among business executives as well as internal resistance to projects whose gains are difficult to quantify. Also, there is a certain suspicion vis-à-vis the notion of the “political” because it seems to be intertwined with narrow lobbying and marketing interests.

What are some specific areas in which companies can get involved?

There are three fields of action that come to mind. Number one is the provision of public services such as education, health and security. Here, corporations should support the state as some already do in the form of public-private partnerships. Secondly, they should get involved in international norm-setting procedures such as the United Nations Global Compact, the SDGS, or the ESG criteria. Finally, companies should participate in processes of public opinion making—this was made clear in the context of Russia’s invasion of Ukraine. The overarching rationale for getting involved is that an investment in political infrastructure amounts to an investment in the conditions of one’s economic success.

How does CPR fit into theories of differentiation?

Usually, we assume a division of labor between state, society and markets. That is why business executives often like to delegate political responsibilities to public actors. And indeed, when thinking of companies as powerful but non-elected “private governments”, we might call into question their political legitimacy. Yet, with CPR, the point is not to fully politicize corporations, but to tease out how they can constructively operate at the interstices of the public and the private sphere, thus assuming their systemic responsibility.

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