In December 2021, President Biden assembled leaders across the globe to discuss business, transparent governance and human rights at the first Summit for Democracy. YALI Network members were invited to attend a three-part virtual business panel, “Our Business Too: Democracy & Private Enterprise Delivering Together.” The keynote address was delivered by U.S. Secretary of Commerce Gina Raimondo and featured emerging leaders in sub-Saharan Africa. The panel highlighted the role of responsible investment, beneficial owner transparency, and open and resilient digital spaces for private enterprises. You can view the full discussion on YouTube.
Here are the main takeaways YALI Network members should consider as they assess their goals and priorities in a private sector business:
Panel 1: Responsible Investment
Responsible business practices are grounded in human rights, the rule of law and equity.
Panelist Dr. Amy Jadesimi is the CEO of LADOL Free Zone, an engineering facility invested in long-term industrialization focused on job creation in Lagos, Nigeria. The private sector has to grow tremendously to create more jobs, she said: “You cannot have a strong civil society if people don’t have work and dignity.” To expand the workforce, Dr. Jadesimi suggested private enterprises:
- Create sustainability – Recognize that to create a new workforce market for future generations, businesses must create sustainable and profitable businesses. (Her definition of “sustainable” refers to the United Nations 17 STGs.)
- Work closely with your government – “Create new paradigms, which you then work with government to create policies for,” Dr. Jadesimi said.
- Develop a clear business model – “If you want a thriving environment in low- income, high-growth countries, it’s clear that private sector institutions play an absolutely critical role. And, therefore, companies like LADOL have to have clear business models driven by sustainability and focused on … creating jobs with dignity and solid career prospects,” she said.
When asked how governments and businesses can work together to strengthen democracy through responsible investment, Dr. Jadesimi emphasized:
- Focus investments in areas you want to see developed. In many high-growth, low-income countries, investment is based on whether the company can provide security and not on important factors such as ESG or sustainability credentials.
- Governments should set a global standard for sustainability targets and frameworks for companies. An improved model will create a new definition of bankability that enables private sectors to invest in responsible and ethical practices.
Panel 2: Beneficial Owner Transparency
Beneficial owner transparency is defined as “how businesses can work to make transparent who owns and controls the business. Transparency is one of the four key elements of the rule of law. When the rule of law is strong in countries, other socioeconomic benefits to the country are also strong”, said Teresa Jennings of LexisNexis, the moderator of this panel. Data shows that GDP and life expectancy rise, while child mortality and corruption decrease, when businesses practice transparency.
Lola Adekanye from Nigeria leads the Business Integrity and Anti-Corruption Programs at CIPE Africa. When asked, “From your perspective working in a dozen countries in Africa, what difference does beneficial ownership transparency make to how businesses function in a democracy?” Adekanye answered: “It’s the kind of refund [opportunity] that offers reforms for many societies — for civil society organizations, for the government, for citizens and for the business community. That’s because it helps governments provide conditions [for] business leaders all over the world, especially in low-income, high-growth countries, where institutions are often weak in terms of regulatory institutions.”
According to Adekanye, there are three major conditions that enable businesses to align with democratic ideals:
- Fair competition – Businesses need an equal playing field, and ”budget padding” makes it difficult for companies to know who is bidding on public projects or submitting tenders. Small businesses that do not have the resources to conduct investigations into this illegal practice are particularly at a disadvantage. Businesses must advocate for the enforcement of transparent bidding practices by governments.
- Accountability – One of the biggest challenges to reducing corruption and illegal business flows is impunity, Adekanye said: “When business owners and governments can evade sanctions or penalties, it sends a very dangerous message … and creates more opportunities for corruption.”
- Transparency – “Without transparency, due diligence cost goes up,” Adekanye said.
Panel 3: Rights in Governance in the Digital Space
There are 4.5 billion social media users around the world. There are 150,000 Facebook messages posted every 60 seconds. Digital information provides the private sector and governments with incredible value. However, there are human rights risks and transparency issues that come with using the digital space.
Moderator Dr. Andrea Bonime-Blanc, CEO of GEC Risk Advisory, asked panelists: “How do you define an open and resilient digital space? Does it differ from what you see today? What is the work that we need to do?”
Rebecca Enonchong, the CEO and founder of AppsTech and board chair of Afrilabs in Cameroon, responded: “Africa has the highest number of internet shutdowns and censorships. Often, when there are elections, social media websites are censored or the internet is shut down.” To reach an open and resilient digital space in Africa, she suggests three elements:
- Accessibility – The internet has to be available for all people to connect.
- Affordability – One of the ways governments restrict access to the internet is by making it incredibly expensive to view or upload data, Enonchong said: “The lack of affordability of [the] internet makes other services unavailable,” such as online courses or news.
- Unrestricted access to the internet – Internet censorship affects free speech and businesses.
Enonchong recommends that governments in Africa prioritize protecting citizens in the digital space through appropriate cybersecurity laws.
She finds that many of the cybersecurity laws in Africa tend to silence free speech rather than protect citizens. Governments should make sure that the online aspects of the internet are protected and ensure the integrity of the physical technology infrastructure.
To view the entire panel, click here. For more information about the Summit for Democracy, please visit https://www.state.gov/summit-for-democracy/.
The views and opinions expressed here belong to the author or interviewee and do not necessarily reflect those of the YALI Network or the U.S. government.
Visit the YALI Network democracy page for more resources.