Given Ukraine’s well-documented battle with corruption, the emergence of a new business community driven by the principles of integrity and compliance sounds almost too good to be true. The Ukrainian Network for Integrity and Compliance (UNIC or the Network) is a new initiative that unites local and international companies active in Ukraine who consciously chose to do business in a transparent and ethical manner. Less than a year since the initiative was first unveiled, some members are already preparing for certification in accordance with UNIC standards.
Doing business in Ukraine remains challenging, with corruption issues helping to prevent greater international and domestic investment. Due to these difficulties, the economy lacks the capital to create new products, services, jobs, and tax payments. In this climate of frustration and unrealized potential, it is little wonder that the launch of UNIC in October 2017 tapped into long overdue demand for transparent and ethical approaches to doing business in Ukraine.
Initiated by the Business Ombudsman Council in Ukraine with support from the European Bank for Reconstruction and Development and the Organization for Economic Cooperation and Development (the Network’s main founders and donors), UNIC serves as a platform for promoting responsible business approaches. It is also a source of expertise and dialogue on implementing integrity and compliance standards at as many Ukrainian companies as possible. The Network hosts educational events promoting compliance culture in business circles. These efforts have resulted in stable initial growth in interest towards the UNIC: member companies currently represent 46 cities and towns of Ukraine and are drawn from the pharmaceutical, agricultural, banking, construction, finance, trade, food, manufacturing, legal services, and other industries.
UNIC membership offers a combination of benefits and obligations. Members pledge to maintain their good reputation, to improve their integrity and adherence to transparency practices, and to assess their corruption risk by implementing an internal compliance program. Having achieved a high level of integrity and compliance, they eventually pass UNIC certification based on the internationally recognized ISO 37001:2016 standard.
It is no easy task to instill rigorous ethical and integrity principles to govern decision-making on all company levels. However, for a Ukrainian business of any size, UNIC certification provides tangible benefits such as helping to attract investment, improve the quality of contractors, and enhance the company’s reputation.
Signal to Foreign Investors
Investment, commercial financing, tenders, and new orders – all this should be easier to realize for a company certified as adhering to a recognized international standard. Additionally, UNIC certification can provide these businesses with compliance practices to facilitate access to various funding formats and ease their entrance into foreign markets. UNIC certification is also a recommended step for local companies applying for funding from international financial institutions operating in Ukraine.
For medium-sized businesses that do not yet feel ready for certification, the Network’s educational programs offer valuable insights on using compliance culture to streamline internal processes and improve management systems, both of which are prerequisites for companies looking to secure external funding. UNIC experts can offer insight into compliance practices successfully implemented in Ukraine, along with case studies and the chance to engage in dialogue with larger companies that have successfully developed internal compliance systems. Meanwhile, UNIC membership gives small businesses opportunities to share and adapt successful compliance practices from larger companies that have already come a long way in developing their integrity culture.
UNIC certification is also an opportunity for large businesses to prepare for future due diligence by foreign investors and to improve their chances of receiving external funding, since the demands made of certification applicants are similar to those of the international financial institutions funding Ukrainian companies.
Using the UNIC platform to share experiences and to learn new practices can help mid-sized businesses formalize internal processes and decrease dependence for success on specific employees and contractors. It is also worth noting that the Network’s mid-sized member companies tend to pass contractor pre-qualification processes with international companies much faster than many of their peers, with UNIC membership serving as a “quality assurance” of sorts.
Reputation and Community
The Network aims to serve as a platform uniting compliance champions into a community whose membership is both prestigious and practically useful. UNIC certification can be a worthy investment, strengthening the reputation of a business and validating its commitment to compliance. This is especially true considering the high demand among local large and mid-sized companies for funding or partnerships. Another invaluable opportunity all UNIC members enjoy is sharing practical examples of best practices while implementing integrity and compliance measures in Ukraine’s business environment.
Introducing profound changes to the internal functions involved in compliance processes is something the Network’s events help mid-sized businesses to achieve. Moving from UNIC membership to certification sends a powerful signal to foreign investors in Ukraine about a member company’s future prospects and reliability.
The greatest single value that small businesses gain from UNIC membership is probably networking with larger companies, since at this stage they often tend to lack the necessary funding to attract external consultants to improve their internal management. Participating in UNIC education programs gives small businesses access to the kind of expertise they need in order to grow and evolve further in the Ukrainian business environment.
Based on the initial response to the launch of UNIC, it is clear that demand for ethical and transparent approaches to doing business is on the rise in today’s Ukraine. It is also notable that local companies are driving this growth. UNIC has set out to demonstrate the practical and economic viability of integrity and compliance in Ukraine. The introduction of a UNIC certification procedure based on international standards will hopefully help to make this process more visible to the business community and the public alike.