"Do not just frame ‘integrity and transparency’ as pure moral values because this is actually an interesting combination of ethics and business. Put it another way, integrity and transparency are the core of business administration, dominate communication processes, information exchanges within the business, and bottom-up and upside-down interactions,” said Mr Nguyen Quang Vinh, Member of Standing Committee and Deputy General Secretary of the Vietnam Chamber of Commerce and Industry (VCCI) at a conference announcing the survey report titled “Current Integrity Practices in Business and Demands for Corporate Capacity Building Support” in Hanoi.
This is an activity within the framework of Project 12 - Enhancing Integrity Initiative in Business, a business-led initiative launched by the Office for Business Sustainable Development under VCCI and implemented in 2015 -2019.
The result of a survey with 180 businesses operating in Hanoi, Danang and Ho Chi Minh City shows that 55 per cent of respondents agree on the correct understanding of integrity that integrity in business is individuals and companies behave towards business operations in conformity with rules and standards generally accepted in commercial practices or legislated into laws to effectively prevent corruption. Regarding transparency and the Code of Conduct in business, in the range of 92.78 per cent and 93.82 per cent concur with the view on transparency and the Code of Conduct in business. The degree of consensus on the views transparency in business and the Code of Conduct is fairly similar.
According to the survey report, only 29 per cent of companies surveyed have implemented regulations, policies and procedures on business with integrity and transparency. However, some businesses said they have not carried out overall business integrity programmes but they have applied such measures as controlling spending, including multiple assessment levels, limiting spending and requiring documentation and having reporting mechanism in a bid to discover and restrict internal frauds (over 60 per cent). Banking industry has the highest rate of deployment, with most measures exceeding 80 per cent. This rate perhaps illustrates banking characteristics, i.e., daily financial transactions and broad employee involvement.
Moreover, other policies such as procurement-tender, staff rotation, gift presentation and reception, complaint and denunciation are out of focus by many companies. More than 50 per cent of companies surveyed have focused on implementing regulations on internal control, recruitment, training, competency assessment, remuneration, promotion, treatment and guest entertainment.
Economist Pham Chi Lan said, in Vietnam, taxes and charges account for 40.8 per cent of a company’s gross profit. She said businesses are imposed a lot of taxes and charges but they are unable to control them. Pay of Vietnamese companies accounts for 0.72 - 1.02 per cent of their profits.
Some reasons have been cited for the failure of Vietnamese companies in carrying out business integrity programmes when they are compared to multinational corporations, including insufficient capability to control all business regulations, insufficient personnel, and difficulty in defining core values and, if implemented, insufficient regular training and lack of consensus in the business.
She said, to enhance corporate competitiveness and economic competitiveness, it is important to speed up national business start-up programmes and business conditions/procedures must be maximally simplified.
Besides, it is necessary to create a fair, competitive environment for all businesses. State-owned companies must be reformed and placed under market disciplines. It is important to reform the system of policies and institutions to facilitate the development of the private sector, especially protection of property rights and access to resources, innovation and competition policy.
Ms Lan said businesses themselves need to develop their strategies to enhance their competitiveness, accept competition and learn how to connect. They must build corporate culture and business ethics and implement corporate social responsibility (CSR) to shift from price competition to non-price competition (quality, standards, differences, etc.)
Mr Nguyen Quang Vinh said that seeking opportunities of searching profits in ‘muddy waters’ is an old and short-term way. Nowadays, the economy is growing to a level that actual opportunities are only for companies with long-term visions to pursue sustainable development values. Integrity and transparency will provide a foundation for the creation of business value because it includes business operations into a compliance process with certain ethical values and norms of an organisation, a country, and the world at a higher level.
Mr Florian Beranek, UNIDO Lead Expert on Societal Responsibility
The principles of INTEGRITY are going far beyond today's buzzword compliance. It's about a corporate culture, which is based on values as transparency, trust, respect, and forgiveness. These are the foundations of a modern enterprise which is able to succeed on the global marketplace.
Integrity also offers the open space needed for creativity and innovation while the pure compliance approach is limiting innovation. So in short, integrity is a must-have for those businesses that want to climb the production chain and increase their value."
Ha Vu - VBF