How Can We Engage SMEs Exporting to Frontier Markets With the Case for Doing Business With Integrity?

By Richard Gilbert, Challenge Director, Business Fights Poverty

Introducing our new Challenge on doing business with integrity, with support from the UK’s Department for International Development. This Challenge aims to identify the best way to articulate and communicate the benefits of doing business with integrity to SMEs exporting to frontier markets, with a focus on eradicating bribery and corruption.

Bribery and corruption are major barriers to global trade and investment. 43% of compliance officers of UK firms indicated that they had decided not to do business in a country due to the perceived risk of corruption. And at the firm level, the evidence shows that the disadvantages of bribery outweigh the benefits over the long-term. An OECD study in 2014 showed that bribes average just over 10% of the value of a given transaction and a staggering 34.5% of profits. Crippling financial penalties and a loss of investor confidence can also hit companies that run the risk, are caught and prosecuted.

HMG’s recently announced Business Integrity Initiative (BII) aims to build a successful British business presence in frontier markets, while promoting high standards of integrity and ethical behavior in line with the 2010 UK Bribery Act. BII will encourage and support UK companies to embed ethical values into business strategy and practice, provide practical tools that support the long-term growth prospects of UK businesses and strengthen efforts to create a level playing field that enables responsible companies to compete fairly.

However, initial research among UK businesses, in particular SMEs, suggests, on the one hand, a lack of awareness and understanding of the corruption risks associated with exporting to frontier markets and the requirements of the UK Bribery Act, and, on the other, the potential business benefits that can arise from doing business ethically. Punitive language used in relation to the UK Bribery Act can act as a barrier to engagement and it is hard to find relatable information that helps businesses to better understand the risks and opportunities, and how to take appropriate action.

Against this backdrop, Business Fights Poverty, the world’s largest business-led collaboration network focused on social impact, is leading a Challenge, with support from DFID, to identify the best way to articulate and communicate the benefits of doing business with integrity to SMEs exporting to frontier markets, with a focus on eradicating bribery and corruption.

In summary, the Challenge aims to develop a communications strategy, messaging and materials, including case studies and opinion articles, to help reinforce the value of doing business with integrity as a long-term driver of commercial success in the minds of SME exporters, rather than simply a compliance requirement, and over the long-term to drive behaviour change. To inform the strategy and messages, a planned research process aims to:

  • Build a deeper understanding of SME attitudes to integrity issues and their barriers and incentives for doing business with integrity
  • Identify key business influencers and networks that can be harnessed to convey key messages and influence behaviour change
  • Collect relatable examples of good practice and create case studies and opinion articles that demonstrate the commercial benefits of doing business with integrity and inform action.

Underpinning the Challenge will be a collaborative, business-driven process, with an emphasis on the active engagement of SMEs to provide real life insights and experiences. At the heart of the Challenge is a small Core Group of organisations comprising business integrity experts and SME representative organisations to provide advice and direction to Business Fights Poverty, and to facilitate access to other experts and SMEs.

Two expert panels will also be convened as focus groups to provide further insights and inputs. One expert panel will comprise large multi-national companies who work with small and medium sized companies in their value chains as clients or suppliers.

The other will comprise SMEs exporting to frontier markets. In addition, Business Fights Poverty will be conducting desk research, an online survey and telephone interviews.

Once research and analysis are concluded, Business Fights Poverty will develop a communications strategy and recommended messages, which will be reviewed in a workshop, and subsequently refined for use in communication activities designed to engage SMEs with the BII. Additional outputs of the Challenge will be a series of case studies that demonstrate the benefits of doing business with integrity and blog articles authored by key influencers.

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