„Companies should contribute to the political debate“
Ms. Kreis, as President of the Deutsches Aktieninstitut (German Stock Institute), you emphasised at the annual reception that everyone must counter right wing populist and Eurosceptic tendencies. Germany is celebrating 75 years of the constitution. What can companies do to strengthen democracy?
The phrase democracy is the sum of us may sound clichéd, but it carries an important message. Responsibility for democracy starts with the individual. All citizens share this responsibility equally. We shouldn't wait for politics or companies to take this responsibility away from us. Civic engagement is, therefore, of great value. But even though the responsibility and voting decisions lie with each individual, companies can and should contribute to the political debate. This mainly involves openly pointing out the consequences of populist policies for the economy and prosperity.
How important are a strong constitution and democracy for a business location? Companies generally operate globally, including in regions with weak democratic structures.
Economic success is based on many pillars. Autocracies and totalitarian regimes can also be economically successful, at least temporarily. However, scientifically conducted studies underscore the importance of democratic principles for the economic development of a region. Features such as the rule of law, separation of powers, and limitations on executive power tend to positively impact productivity and prosperity in the long term. These attributes are present to varying degrees worldwide and always play a role in investment decisions. Companies prefer to invest in regions with strong legal certainty, as global capital flows demonstrate.
Are German companies being questioned by investors or customers about the rise of right wing populism in Europe? Do issuers find that international institutional investors view this as a risk and disadvantage for the German capital market?
Investors closely monitor the political landscape as a relevant factor for business locations. And yes, German companies and the members of the German Stock Institute are asked how they perceive the rise of populist parties in Germany and Europe. Generally, though, Europe and Germany still rank as politically stable and reliable locations, especially in an international comparison.
Polarisation in society and social inequality are considered threats to democracy. Can companies help counteract these issues? For instance, the tire company Michelin recently announced it would ensure a decent income for all its employees worldwide.
I think the answer is both yes and no. Companies with strong values can set a positive example for their employees, customers, and suppliers. It’s important for companies to clearly commit to their values and stand by them, for instance through the application of a code of conduct. Whether these corporate values extend beyond the workplace and influence employees’ lives more broadly is hard to determine.
Values are one thing, but does pay also play a role?
Compensation is certainly a crucial component of employee satisfaction. However, income alone doesn't seem to be a cure-all for societal polarisation. This is a global phenomenon affecting both high- and low-income societies.
Regarding the European elections, you emphasised the EU as a guarantor of democracy and prosperity, while also calling for closer engagement between EU institutions and businesses to strengthen Europe’s competitiveness. Are companies finding it hard to be heard in Brussels?
The European idea and the European Union deserve great recognition for their contributions to democracy, security, and prosperity on the continent. Strengthening competitiveness has always been a core concept of the EU. It’s essential to bring this concept back to the forefront. Currently, political priorities lean towards micromanaging the economy. Undoubtedly, bureaucracy at the EU level has increased in recent years. The principles of subsidiarity and trust in market innovation seem to be losing traction. Brussels needs the knowledge of businesses and the efficiency of capital markets to tackle challenges such as climate change and demographic shifts.
Are companies in a dilemma when their investments and business contribute to a country’s prosperity and political stability, yet they find better competitive conditions abroad?
Political stability has multiple roots. Prosperity is one of many factors that favour stability, but there’s no linear correlation. It’s the responsibility of politics to provide good and reliable investment conditions. The German Stock Institute contributes its expertise to ensure that Germany and Europe remain competitive locations.
The German Stock Institute awarded the Pulse of Europe citizens initiative with the Meritum Award for their commitment to a united, strong, and democratic Europe. Was this also a signal to support civil society initiatives? Typically, associations donate more to political parties.
Pulse of Europe is a great example of the responsibility of all citizens mentioned at the beginning. Members of Pulse of Europe are united by their belief in the European idea. They are convinced that citizens must actively work for a viable, united Europe. The Deutsches Aktieninstitut wants to support and acknowledge this idea with the Meritum Award.
Do you think it’s beneficial for companies to encourage their employees to vote, or support democracy?
Free elections are a core element of any vibrant democracy. Voting is not a given worldwide. Historically, people in all democracies have fought hard for this right. Therefore, I find it very beneficial to encourage voting. At DHL Group, we recently promoted participation in the European election. We obviously don’t make any specific recommendations. The decision to vote is entirely private for each colleague.
