The Business Sector – The Backbone of Israeli Democracy | Herzliya Conference 2026

On July 1, 2026, the Arison Center for ESG at Reichman University hosted a panel at the Herzliya Conference examining the role of Israel’s business sector in safeguarding democratic resilience. The panel was moderated by Prof. Nir Hashai, Chair of the Arison Center for ESG and Dean of the Arison School of Business, with the participation of Chemi Peres, Co-Founder of Pitango Venture Capital and Chairman of the Peres Center for Peace and Innovation, and Sami Peretz, a journalist at TheMarker and Haaretz.

The discussion focused on whether corporate involvement in public and democratic issues, such as the judicial reform, falls outside the traditional role of business or should instead be understood as part of corporate responsibility. While companies are primarily expected to create economic value, employ workers, provide goods and services, and generate returns for shareholders, their ability to do so depends on functioning institutions, the rule of law, regulatory certainty, public trust, and an independent judicial system.

Democracy as Economic Infrastructure

A central theme of the panel was that democracy is not only a social or moral value but also an important economic foundation. Comparative data from the World Justice Project and other studies indicate an association between effective checks on government power, lower levels of perceived corruption, and higher standards of living. Strong institutions allow companies to assess risks, attract capital and investors, and plan for the long term.

The panel nevertheless highlighted the limits of corporate political power. During the judicial reform period, parts of the business sector considered stronger forms of protest, but many companies remained dependent on government regulation, licensing, tenders, and ongoing relationships with public authorities. Companies must also take into account that their employees may hold very different political views, making the use of corporate power for political purposes particularly complicated.

The Israeli High-Tech Paradox

The discussion emphasized the growing influence of major corporations and the broader responsibilities that may accompany that influence. This is particularly relevant to Israel’s high-tech sector, which contributes substantially to exports, GDP, and tax revenues.

Paradoxically, high-tech companies, which are among the most internationally mobile businesses and can more easily relocate capital or operations abroad, were also among the most publicly involved in opposition to the judicial reform. More locally dependent industries often acted more cautiously because of their reliance on Israeli regulators and government institutions.

This difference does not necessarily reflect different levels of commitment to democracy. Rather, it illustrates different economic incentives and dependencies. International companies face expectations from global investors, employees, and customers, while domestic companies may be more concerned about the consequences of confronting political decision-makers or regulators.

What Can the Business Sector Actually Do?

The panel also considered the practical tools available to the business sector in times of democratic crisis. Although Israeli businesses control significant financial resources and support major social initiatives, their ability to directly block government policy remains limited.

More extreme measures, such as economic shutdowns, withholding taxes, or moving capital abroad, raise significant legal and ethical concerns. The discussion therefore highlighted a fundamental tension: efforts to defend democracy risk losing legitimacy if they themselves violate the rule of law, while relying exclusively on existing institutional mechanisms may become increasingly difficult when those institutions are themselves under pressure.

From Corporate Governance to Democratic Resilience

The panel’s conclusions also broadened the meaning of the “G” in ESG. Corporate governance is usually understood as relating to internal corporate structures,boards of directors, shareholder meetings, compliance, oversight, and executive responsibility. Yet companies cannot maintain sound governance over time within an unstable institutional environment.

Judicial independence, an effective public service, anti-corruption mechanisms, freedom of the press, and the ability of citizens and civil society organizations to scrutinize government all influence corporate risk management. Democratic resilience should therefore be viewed not as separate from ESG, but as part of the institutional environment on which sustainable business activity depends.

The conclusion was not that corporations should become political organizations or replace elected officials. Rather, businesses should recognize their dependence on strong democratic institutions and consider how their decisions and public engagement may affect the conditions that allow them, and the broader economy, to operate, invest, and grow over the long term.

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