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Corruption chips away at young people’s future by denying them access to basic services, undermining employment and business opportunities and fostering distrust in government systems. A WEF and UNODC survey emphasized this issue by revealing that three out of four millennials perceive corruption as the main obstacle holding back their countries and depriving their generation of social, political and economic opportunities.
For young entrepreneurs from Asia Pacific, this poses difficult challenges. Corruption hinders innovation, increases the cost of doing business and discourages young entrepreneurs from operating with integrity. Moreover, it creates severe financial, operational and reputational risks to young entrepreneurs. They might be forced to pay bribes or face unnecessary obstructions from government officials.
It is essential for young entrepreneurs to address corruption risks in the early stages of their startups. That’s why young people are increasingly motivated to operate their business with integrity through social entrepreneurship. By adopting integrity standards, they can reduce the risk of corruption and minimize its harmful impacts. Business integrity is indispensable to young entrepreneurs — without it, their businesses fail and societies suffer. In fact, in the long term, ethical businesses outperform their industry competitors.
To support and encourage young entrepreneurs to operate their businesses with integrity, Youth Co: Lab has teamed up with UNDP Fair Biz[1] to develop a “Business Integrity Toolkit” aimed at assisting young entrepreneurs in dealing with corruption. The Toolkit is a useful resource for young entrepreneurs who want to implement and maintain business integrity in their practices. With the right support, young people can become the champions of integrity that our societies need.
Ethical entrepreneurs attract more business
Entrepreneurs who have a reputation for ethical behavior enjoy more commercial opportunities over their competitors. Several studies found that integrity is essential for building trust among customers and to foster long-term commercial partnerships. People increasingly consider a company’s ethical practices and values before buying their products. Moreover, entrepreneurs seek business partners with matching commitments to ethics and integrity.
High integrity means more investment
Potential investors are increasingly looking at business integrity standards and practices of a company to determine how risky it is to invest. They might investigate if a company engages with controversial industries, but also if a company has a history of unethical behavior in the workplace. Companies with low-risk profiles are more appealing to investors and as a result, have easier access to capital and resources. In addition, integrity policies counteract the dangers of theft and fraud.
In Viet Nam, UNDP Fair Biz is working on developing a set of standards to promote and enable business integrity practices. Impact investors will be able to use their Responsible Business Practice (RBP) checklist to assess the business integrity standards and practices of potential new business ventures.
Integrity policies reduce the risk of corruption
Companies with adequate integrity checks and policies are less exposed to corruption risks. By identifying, prioritizing and reducing particular dangers through, for instance, compliance programs, companies gain a competitive edge over firms lacking these policies.
This is especially relevant for smaller organizations, which are particularly susceptible to corruption. Also, companies that act with integrity are likely to suffer fewer consequences, such as reputational damages or legal consequences, when corruption does occur because they have harnessed ways to reduce the impact of such events.
Ethical businesses keep employees happy
When employees find their managers trustworthy and ethical, job satisfaction, employee morale and retention increases. This has a notable impact on organizational performance in terms of productivity, profitability, and attractiveness to prospective job applicants. On the other hand, a company’s involvement in bribe paying greatly lowers employee morale. Integrity is key to motivating employees and generating business success.
Want to know more about how to protect your business against corruption? Don’t forget to check out our newly developed “Business Integrity Toolkit”, which aims to help and encourage young entrepreneurs to adopt integrity and good governance practices into their businesses. With the right support, young people can become the champions of integrity that our societies need. Please find the toolkit here.
[1] The multiyear regional project – Promoting a Fair Business Environment in ASEAN (“Fair Biz”) – is implemented by UNDP in cooperation with the UK Government to promote fair, transparent and predictable business environments by working with both governments and the private sector, with particular focus on Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Viet Nam.
Co-led by UNDP and Citi Foundation, Youth Co:Lab establishes a common agenda for countries in Asia-Pacific to empower and invest in youth so that they can accelerate the implementation of the Sustainable Development Goals (SDGs) through leadership, social innovation and entrepreneurship. Read more about Youth Co:Lab here.
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