Nov 03, 2026
A Commitment to Proactive Measures: Markus Scholz and Benedikt Kapteina on Protecting Liberal Democracy
What responsibility do companies bear for protecting liberal democracy and the social market economy associated with it? Prof. Dr. Markus Scholz and Dr. Benedikt Kapteina of the Chair of Responsible Management at TU Dresden address this question in an article for the current issue of *Audit Committee Quarterly* (III/2026). This issue of the corporate governance journal, published by the Audit Committee Institute (ACI), focuses on the theme of “polycrisis.”
The authors argue that companies benefit in a unique way from the institutional foundations of liberal democracies. The rule of law, independent courts, protected property and contractual rights, and rule-based competition create the predictability and planning certainty upon which long-term economic success depends. The increasing threat to these foundations posed by populist and illiberal political developments therefore also justifies a shared corporate responsibility for their protection.
However, in the authors’ view, public statements by corporate leadership against populism and extremism are not sufficient and may even have counterproductive effects. Rather, strategically well-thought-out political engagement is crucial. To this end, Scholz and Kapteina develop the concept of “Corporate Political Preparedness”: Companies should prepare early on for potential changes in the framework conditions, analyze political risks, develop a binding set of values, and define clear boundaries as well as courses of action for various political scenarios.
Political preparedness thus becomes a responsibility of sound corporate governance that the executive board and supervisory board should fulfill jointly. The goal is to ensure that companies have their principle-guided action-taking capacity even under changing political conditions.