Professor Markus Scholz on Why CEOs Need a New Political Stance
In his new op ed for Handelsblatt, Professor Markus Scholz from the University of Dresden argues that CEOs need a new political stance. He claims the times of apolitical management are over. The business need to continue to trade with autocracies requires a new attitude. Quite in a Milton Friedman sense, companies spent the past decades in political apathy of strict separation between business and politics.
The increasing inability of political actors to enforce globally effective regulation that can protect people and nature in the long term is revealed in the worsening climate crisis. Moreover, despite economic globalisation, democracies are on a downward trend in numerical and qualitative terms. Against this background, companies must learn to evaluate political responsibility and scope for action. CEOs are ambassadors of influential organisations. They should be aware that "business as usual" exposes silent complicity with autocratic rulers and the human rights violations they commit.
Performance of CEOs will no longer be assessed solely on the basis of balance sheets. CEOs must be able to credibly inform employees, NGOs, governments and increasingly capital investors about their stance towards autocracies and dictatorships. They have to show which strategies they will use to address gross human rights violations.
There are many tactics available to CEOs here. Directly, CEOs act by openly criticising human rights violations. Indirectly, they can help by supporting NGOs. In addition, companies can work with other companies, governments and NGOs to create best practice standards giving signatories the ability to enforce them.