Management must set the tone for a culture of business ethics and integrity

Day 1 of ASEAN Responsible Business Forum closed with two sessions touching on the implementation of corporate responsibility for micro, small and medium enterprises (MSMEs), and the importance of instilling a culture of business integrity in organisations.

Panellists for Session 2 on “Making the Case for Responsible and Inclusive Business among MSMEs: Challenges and Opportunities” shared their experience and knowledge about what MSMEs can do to be more responsible and inclusive. Echoing an earlier comment by another speaker in previous session who said that there is a need to educate young entrepreneurs about ethical business, Mr David Kiu, Vice President, Corporate Affairs, Mars Wrigley Confectionery Asia-Australia, Middle East and Africa said that CSR is “not about compliance… but it’s about the belief that inclusive business is better business”. Management must set the right tone to run their business with integrity, and be inculcated about the need to treat their employees well. There is no need to look at big implementation. Even simple polices like medical insurance, decent wages and education loans for employees’ children are a good start, as Mr George T. Barcelon, Chairman, Philippine Chamber of Commerce and Industry shared.

In the last session of the day which touched on enhancing Business Integrity and Anti-Corruption in organisations, Professor Lawrence Loh from the National University of Singapore (NUS) Business School’s Centre for Governance, Institutions and Organisations (CGIO) presented the findings from the joint study on Corporate Disclosure on Business Integrity in ASEAN which was conducted together with the ASEAN CSR Network (ACN). The study looked at the 50 largest companies by market capitalisation in each of the five countries – Indonesia, Malaysia, Philippines, Singapore and Thailand – and assessed their level of public disclosure related to their anti-corruption efforts.  This is the second study, with findings from the first baseline study conducted in 2016.

In the latest study, it was found that the top ASEAN listed companies across all five countries scored an average of 56 per cent in their overall level of disclosure of anti-corruption practices. This is an increase of 11 per cent from the 2016 baseline study. The improvement in corporate disclosure of anti-corruption practices by top ASEAN listed companies is laudable, more nations have implemented new codes to encourage business integrity disclosures and to curb corruption with increasing awareness of the corporate governance landscape in ASEAN. But concerns remain over a lack of safeguards and practices regarding external relationships with agents and suppliers dealing with the organisations [Click for the full report of the study].

Panellists at this session agreed that while it s good news that more companies are disclosing their policies and practices on anti-corruption, there is a need to understand what is the actual practice on the ground and if enforcements of legislation is being carried out diligently to weed out corruption. Adequate compliance of anti-corruption regulations within a company does not mean just checking the boxes, as Ms Sophia Aspesi Areias, Business Integrity Programme Manager, Transparency International Cambodia rightly highlighted. For example, it requires dynamic assessment to understand if employees are aware of company policies and behaviours that are acceptable to the company and apply them practically.

At Day 2 of the Forum tomorrow, sessions will cover issues related to climate change and human rights in the supply chain.