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Ukrainian Businesses Choose Better Business Behaviour

03.04.2019

During the recent years, Ukraine has implemented numerous reforms to fight against corruption. To name just a few, designing the anti-corruption courts, creation of the Business Ombudsman Council (BOC), etc. The neutrality of the institutions, which are meant to stem corruption, is essential. For instance, the independent nature of the BOC shields it from interference by the government and has allowed it to be regarded as trustworthy among businesses and individuals, best exemplified by the increasing number of cases submitted to it, mostly by SMEs. I encourage the readers to check the BOC website to find out more about its activity.

Acknowledging the need for substantial efforts to address corruption and the unfair treatment to business to advance economic growth and expressing their support to anti-corruption efforts, the BOC initiated launching of the Ukrainian Network of Integrity and Compliance (UNIC), the brand-new anti-corruption collective action in Ukraine.

The notion of the collective action denies the old famous saying, which is “divide and conquer”. Today an ethical business, especially in Eastern Europe, cannot allow themselves to be divided. To this end, at the beginning of 2017, the project proposal was developed from the very scratch (e.g., preparing and submitting a project proposal to the EBRD and the OECD, conducting negotiations with embassies, associations, companies, preparing internal documents). As a result of this work, in May 2017, the Business Integrity Declaration was signed by more than 50 entities.

This shows that business leaders in Ukraine support developing processes that weave integrity into the fabric of business organizations. An additional example of positive transformations is that the number of corporate integrity (ethics) and compliance workshops, seminars, forums and conferences is running higher each year in Ukraine. I call these business transformations “from cleaning up to keeping clean”.

UNIC serves as a platform for promoting responsible business approaches and zero-tolerance to corruption. It is also a source of expertise and dialogue on implementing integrity and compliance standards at as many Ukrainian companies as possible. At the end of the day, compliance is about culture and leadership, and what, in my view, UNIC is trying to do in Ukraine is to create leaders who are well versed in how to deal with compliance and ethics issues. Knowledge does not create culture, but lack of knowledge can diminish and destroy it.

UNIC members pledge to maintain their good reputation, to improve their integrity and adherence to transparency practices, and to assess their corruption risks by implementing an internal compliance program. In my opinion, both the private and public sectors finally tend to apply name and praise instead of the name and shame approach in Ukraine. It means that instead of saying that business has done something wrong it is better to promote what business has done right. Displaying success stories should introduce positive benchmarking. Such interpretation gives a message that the society must change the top down to the bottom-up approach.

UNIC tries to implement such approach in Ukraine through the introduction of compliance certification – a tool designed to distinguish compliance champions in Ukraine. Without getting into specifics of the procedure, the certification should attest that the company has designed and implemented a risk-based policy and procedure to prevent corruption and other related risks with consideration of such factors industry, structure, business model, size, countries of operation, etc.

Apparently, the certification should confirm that the UNIC member has done all that can reasonably be expected to prevent bribery. Less than a year since the initiative was first unveiled, some members are already preparing for certification in accordance with UNIC standards. Investment, commercial financing, tenders, and new orders all this should be easier to realize for a company certified as adhering to a compliance standard.

All above-mentioned efforts have resulted in stable initial growth in interest towards the UNIC. Currently, UNIC unites 59 companies representing more than 70,000 employees from 46 cities and towns of Ukraine from the pharmaceutical, agricultural, banking, construction, finance, trade, food, manufacturing, legal services, and other industries. In other words, they convert the old saying “divide and conquer” into “unite and win”.

The full issue is available here.