1. What is Impact Values?
Fair business is good business. Let's understand the importance of addressing integrity and good governance practices together as part of the business model. Use this this module to learn about the relationship between trust, integrity and achieving impact and better business results.
Chit Chat With Investor :)
1. Why would an investor look for business integrity in a startup when analysing an investment?
Once Venture Capital firms (or investors in general) invest in a startup, we become a partial owner of your business. Therefore, we expect to work with the founders and a startup as a stakeholder and a partner, sometimes up to 10 years. So it is a long term commitment between investors and a startup, that is why we look for business with integrity so we achieve the win-win situation — we make good return on investment, and you make good money out of the business. Other than that, for obvious reasons, when we invest, we don’t want our money to go to waste, and any dishonesty of a startup could lead to bigger problems that would cost headache, time, and money for both sides such as going to court.
2. How/what do investors usually check on the integrity of the founders?
We conduct the process called “due diligence” which generally would involve getting to know the founders and going through your company’s documents such as existing loan agreements, office rental invoice, company’s book bank, your current address, your reputation among the ecosystem, feedback from your customers, previous criminal records, if any, and etc. We may even invite the founders to casual meet-ups or dinner from time to time just and get to know their real motive of doing business, vision, perspective on life, management style, so we understand more on how integral the founders are.
3. Any tips/ small steps that young entrepreneurs can do now to build a reputation of integrity?
Be honest when you talk to investors, but more importantly, always be honest when you do business. Remember that investors have strong network within the region, so just one lie or false data could result in a community ban. The best way to build an integral reputation is to have an integral mentor that could give you advice and also be your role model. They also can endorse you when it comes to fundraising or presenting products to important clients. So get involved and be connected to the community so you get to meet a lot of great mentors.
2. Making Your Own
Reflecting and Communicating Your Impact Values For You and Your Team
This exercise will help you know yourself and understand how your ethical principles not only guide your personal life, but it can determine how you will conduct your business. This exercise will also help you and your team decide to develop a code of conduct for your company.
Here are a few easy steps to start:
Step 1: Think about who you are as a person, what are my character traits? Character traits are aspects of a person’s behaviour that are valued by the community or society around them. Write down the traits that you believe represent you as a person. If you are having a hard time with this step you can always ask people who are close to you about their opinion.
Step 2: Reflect about what is your personal and professional purpose.
What is my professional purpose and personal mission? Why do I want to fulfil them?
Step 3: Think about your ethical principles that guide you. Ethical principles are the values that set the ground rules for all that we do.
Use the checklist below, it gives a clearer idea of what those principles might be:
Where can it be used?
- To build a strong foundation for your enterprise and attract the right people when hiring, developing or revisiting a mission statement.
- To help you gain trust from your stakeholders when selling your business idea and raising investments.
- Developing internal mechanisms to prevent, detect and respond to corruption and integrity issues facing entrepreneurs.
3. How To Submit?
- Click on the "Submit" button below and follow the form instructions.
- English language is preferred for the regional audience, please kindly seek translation assistance from your local UNDP staff if this is a challenge.
- Please submit an editable file format (e.g. .docx).
- Let us know in the submission form your lessons learnt in applying to opportunities.
- Kindly submit by 26th June 2020.
4. Tell us your insight :)
Choose 1-2 Guided Questions For Your Reference:
1) Why is it important for young entrepreneurs to run businesses with integrity?
2) Why do young people play an important role in business integrity environment?
3) What is your advice to young people when they are facing challenges of running business with integrity?
4) How is the Toolkit useful/important for young entrepreneurs?
5) Given the COVID-19 pandemic, why do you think it's important for us to discuss business integrity?
Resources For The Curious
Example to kick-start your own Impact Values:
Calibrating and communicating your moral compass:
UNDP Business Integrity Toolkit for Young entrepreneurs Introduction
Individuals who set up companies may have their own values and principles which they seek to apply to their work. But when people get together in larger groups, they can end up pursuing different goals which, accidentally or deliberately, can undermine the founding principles of a company, and cause harm both to the company and society.
Corporate governance translates principles into practice. It also helps companies abide by the law. And it forces companies to practise what they preach – in other words, to do what they say they are doing.
Running your business in this way will set you on the right track. It will also help you ensure your company’s longer-term stability and longevity in the years to come.
There are a few more steps required to implement a strong corporate governance culture within your company. We will provide more guidance and tools in the modules to come but for now let’s worry about understanding business integrity and how can you contribute to a fair business environment.
Understand the drivers of business integrity
In talking about business integrity, it is often asked, “What are the causes of corruption?” It is a big question, and there are many answers.
However, we prefer to speak about the other side of the coin. If we take for granted that corruption is present in the business environment, what can we, as entrepreneurs, do to manage this risk and contribute to changing the environment?
We can point to four drivers of business integrity:
1. Your own moral compass
2. The quality of your management systems
3. The law of the land
4. International best practice
While all companies will to an extent work in the context of the local business culture and legal context, a small company’s attitude to business integrity ultimately depends on you and your team’s personal system of beliefs.
Source: UNDP Business Integrity Toolkit for Young entrepreneurs
But how does it work in practice? Check out this case study about a start-up in fin-tech (financial technology) to understand how they started planting the seeds of business integrity within their company.
As a starting point for this journey of understanding business integrity we start with you, your values and beliefs and how you translate them into behaviours and actions.
In a small company the commitment to doing business with integrity may be set by a small number of individuals. Laws might influence but they cannot dictate people’s behaviour. It is particularly difficult to define moral norms and principles through legislation. Norms of professional ethics are easier to lay down in a code of ethics. Codes of ethics are not universal. They are meant to define the needs and values of a certain organisation or agency.
- UNDP (2020), Business Integrity Toolkit For Young Entrepreneurs
- UNODC, What is integrity
- Indeed career guide (2019, How to create a code of ethics)
- EY (2020), ASEAN SMEs: are you transforming for the future (2020)
- UNDP, Pacific Youth Anti-Corruption Advocate’s Toolkit
- Impact Hub, Creating value through business integrity (2015)
- UNDP, The Future is Asian, but Corruption Keeps it Mired in the Past (2019)
About The Module Curator
FairBiz is the UNDP’s programme for Promoting a Fair Business Environment in ASEAN, funded by the UK Government. We believe that countries can only achieve their full socio-economic potential if there’s a governance environment that enables all businesses to flourish, fairly and with integrity. We bring together stakeholders from government, the private sector and CSOs in ASEAN to co-create that environment, supported by technical expertise and other resources. Learn more about FairBiz here.