Ensuring an initiative is set up to survive and thrive
Some initiatives are triggered by a scandal – but that’s unlikely to sustain it beyond the first couple of years.
The Association de la Construction du Québec (ACQ) initially launched its Integrity Program following a critical report of construction industry practices from the Charbonneau Commission. Since then, the ACQ has shifted the focus from negative (avoiding scandals) to more positive (demonstrating ethical values).
In 2017, the UN Global Compact Network Brazil launched an anti-corruption initiative for the construction and engineering sector following the Lava Jato scandal. The positive results inspired a second initiative on urban cleaning, solid waste and effluent – an example of replicating success.
Although large companies (often customers) and smaller companies (often suppliers) have different incentives for engaging in Collective Action, there may be common denominators. Focusing on those can bring the sides together.
The Turkish Ethics and Reputation Society, TEİD, works with SMEs as well as larger companies. Although it has to adapt its language and content, both types of company have common interests – such as attracting foreign customers and investors who demand a robust compliance programme.
Larger firms who are further along their anti-corruption journey can often play a valuable role in mentoring smaller firms.
Initiatives that have encouraged this practice find that it also helps larger firms better understand the needs and challenges of their smaller suppliers.
The Alliance for Integrity offers “Train-the-Trainer” courses that are designed to help compliance officers from larger companies support SMEs along their integrity journey.
Laws and regulations on ethics and compliance – and their proper enforcement – are the biggest stick for most companies. They can therefore help support an initiative’s long-term sustainability.
In Nigeria, the Securities and Exchange Commission made it compulsory for all companies listing on the premium board to get a Corporate Governance Rating System (CGRS). The Stock Exchange then made it compulsory for all others. This helped greatly to boost demand for the rating.
Customers may put pressure on suppliers to demonstrate they have an effective compliance programme in place. Elements may include participating in a Collective Action initiative or gaining local certification.
Practitioners warn that efforts to encourage large multinational companies, government agencies or financial institutions to buy into a Collective Action initiative or certification programme requires time and perseverance.
The Banknote Ethics Initiative (BnEI) has managed to attract 40 central banks – the banknote industry's main customers – to support its objectives. Several now require potential suppliers to undergo BnEI certification as a prequalification for bidding on banknote-related tenders.
Clear Wave, a consumer goods and services labelling initiative, aims to increase demand from customers. If customers prefer to buy from Clear Wave companies rather than the competition, this is a clear incentive to stay engaged in the initiative.
Widening access to business opportunities such as public tenders or investment can be a positive incentive for companies.
The Virtuous Alliance initiative of Argentina’s Poder Ciudadano aims to support SMEs to access public procurement opportunities by helping them to develop robust compliance programmes.
In Nigeria, a CGRS score proved helpful to local companies wishing to list on the London Stock Exchange or raise money on international markets.
Initiatives with initial seed funding need to plan early for sustainability after the funding ends. This might affect the structure of the initiative, although it can also evolve.
Nigeria’s Corporate Governance Rating System (CGRS) is working towards financial sustainability by offering extra services for a small fee. These include personal training or exam invigilation on the company premises. The CGRS also requires that training and self-assessments are undertaken first in the process before collecting primary data for stakeholder assessments. This means the initiative does not waste money on primary data for assessing companies that are unlikely to make it through the process.
The first Global Compact Network Brazil initiative was launched with seed funding. When this inspired a second initiative, the leadership already decided to include cost-sharing between members to help ensure long-term sustainability.
Some initiatives find working groups useful for generating ideas and driving progress, as well as overcoming the “silo” issue. These could be organised around different sectors, different regions or different topics.
An Anti-Corruption Working Group of 90+ organisations leads the Global Compact Network Brazil’s Collective Action initiatives. For guidance in specific areas, it activates and consults the smaller Anti-Corruption Collective Action Advisory Committee.
An expert group of the Ukrainian Network of Integrity and Compliance is responsible for addressing various compliance issues. There is a specific expert group for the pharmaceutical industry, plus a PR group dedicated to equipping compliance officers with communications tools.
Systems need to take into account the different needs and resources of members. For example, SMEs may find it difficult to go through the same qualification processes as MNEs.
The Association de la Construction du Québec (ACQ) offers different membership categories for its Integrity Program depending on a company’s size and resources.
The Banknote Ethics Initiative (BnEI) offers smaller companies unable to go through its rigorous audit process the chance to publicly state their support for the BNEI’s goals.
The Turkish Ethics and Reputation Society, TEİD, initially allows SMEs to complete a simple checklist rather than using the full self-assessment tool.
Of course, these are just examples of what other practitioners have found effective. It very much depends on the context of your initiative and what you’re trying to achieve. Here are a few general things to think about:
- What triggered your initiative and what will sustain it in the long term?
- What is the “common denominator” that unites members?
- What are the main carrots and sticks?
- What are the options for achieving long-term financial sustainability?
If you want to talk over any of this, we’re happy to act as a sounding board. It’s our role under the Siemens Integrity Initiative to act as a free source of guidance and support to Collective Action initiatives. Contact Vanessa Hans.