VBII - Effective Tool to Assess Business Integrity

12:33:03 PM | 9/29/2022

Vietnam Business Integrity Index (VBII), a tool to assess companies in light of business integrity, was recently launched by the Vietnam Chamber of Commerce and Industry (VCCI) and the United Nations Development Program (UNDP) in Hanoi. 

The index comprises seven elements: culture (commitment from the top, management, employees, training), code of conduct, control, communication (employee and gender/inclusion, community, social, environment and sustainable development), compliance, and certification. 

This tool is intended for companies in Vietnam of all sizes, ownership, sectors and structure, including listed companies, domestic private companies, foreign-invested companies, and State-owned companies that are interested in business integrity and see it as a bedrock principle for their growth. Transparency, accountability, and integrity are key elements that define good governance and the existence of a fair business environment in any country. 

“The Vietnam Business Integrity Index is a tool that, if deployed by businesses in an honest and transparent manner, will contribute to improving the country’s standing and brand, building trust based on data and information, attracting investments, generating wealth and improving the lives of citizens,” said UNDP Deputy Resident Representative Patrick Haverman.

Business integrity requires a holistic approach, he said. For integrity to work, the environment, workers, supply chains, government agencies, consumers, and the community as stakeholders must be respected.

Businesses need to be profitable by enhancing the operating environment and by meeting minimum stakeholder expectations. In making any decision on investment locations, global companies will consider the state of respect in the countries for responsible business conduct, with good governance and the rule of law as critical factors.

However, in reality, corruption is still common in certain areas. According to a business survey report released by VCCI and UNDP in June 2022, at least one out of three enterprises taking part in public procurements accepted informal payments to win contracts. Worryingly, the "commission culture" or informal payments have become so common that businesses are willing to pay even if not asked.

Besides, experts pointed out that fraud in business is increasing and complicated in many areas such as management, land use, construction investment, health care and stock investing. Dishonest acts have exerted negative impacts, eroded ethical values, distorted the business environment, increased business costs and other difficulties for businesses.

Vietnam is among only a few countries with a higher position in the Corruption Perceptions Index released by Transparency International, jumping 26 places to 87th in 2021 from 113rd in 2017. The country is also an exception among ASEAN countries, having moved up to the 88th position in the World Justice Project Rule of Law Index. 

To continue attracting quality investments, Vietnam needs to reduce corruption and improve transparency. Businesses' conduct can be a good or bad contributor to the level of corruption in the country.

Mr. Nguyen Quang Vinh, Executive Vice President of VCCI, said sustainable business is no longer a "yes or no" choice but a matter of survival, the only way for businesses to survive and develop in the present and the future. For that reason, the Vietnam Business Integrity Index is a new step to bring Vietnamese businesses closer to international standards of business transparency and integrity, as well as helping companies to couple integrity into business.

VBII was built with the support of the FairBiz project, a UNDP regional initiative funded by the UK Government in the framework of the ASEAN Economic Reform Program, aiming at promoting a fair business environment in six ASEAN countries, including Indonesia, Malaysia, Myanmar, the Philippines, Thailand and Vietnam 

Quynh Anh (Vietnam Business Forum)