4 reasons why businesses should be more open

Cobus De Swardt at WEF: “Many initiatives in recent years have extolled the virtues of governments becoming more open, but now the focus is turning to whether and how businesses will embrace openness.

Here are four reasons why I think businesses should take openness seriously.

1. Openness enhances stability and lowers risk

In a 2012 report, 70% of business executives said “their companies face extensive risk of corrupt activities when engaging agents/business partners in emerging markets and a significant number (46%) felt there was extensive risk when engaging suppliers”.

In the context of foreign bribery laws, companies need to know who they are doing business with – the real living, breathing individuals behind the companies with which they have relationships. ….

2. Openness reassures companies, consumers and citizens

How can citizens know that they are getting the best deal? Let’s take the way governments spend money by contracting the goods and services of companies. Spending this money at the right time, in the right place, for the right purpose is crucial for taxpayers, the people who stand to win or lose the most. So companies who win public contracts must be those with the best bid – not the best contacts book.

Some governments are moving towards more open contracting arrangements, but businesses should see the benefits too…

3. Openness lowers business costs

A growing number of cases show that when governments publish contracts, the quality and quantity of bids increase. Businesses have a better understanding of what is required; they can also make more targeted bids early on. It’s important to prove that there are no dodgy deals going on behind closed doors, which makes ensuring full transparency around who actually owns and controls the bidding companies crucial…

4. Openness demonstrates that businesses are part of the solution

Finally, being open to sharing more information and engaging with stakeholders in a more open manner helps demonstrate that companies can be part of the solution. Businesses are often seen, and sometimes deservedly so, as the perpetrators of corruption – but they can also be its victim. Responsible companies have a role to play in calling for higher standards, publishing information beyond the standards required of them, embracing openness and not fighting lawsuits to lock the information up….

So, how to open up?

It may take a while for the business world to see openness as something more than a compliance or administrative burden, but those that do so are sure to gain. Governments should find ways to incentivize companies to publish information such as their ownership and control structures. ….(More)