International Trade, Investment & Corporate Governance
Think Tank Programme
The financial sector has always been one of the quickest to adopt new technologies. From using phones to provide banking services to the new FinTech sector, the relationship between the two sectors has always been positive.
With all the benefits that technology has presented us with during the pandemic lockdowns around the world, we have had a glimpse into what the future may hold in terms of digital finance.
As we are becoming more reliant on technology, particularly following the COVID19 pandemic, our societies have moved ever closer to becoming cashless. Those who are struck by poverty, without disposable funds, or who live in rural areas are often affected, having limited access to credit, smart devices and secure internet connections.
Technology has revolutionized the way people shop, sell, and save, and people are increasingly moving away from using cash. Even though, the rise of these digital payment systems and electronic banking has led to debates among economists, business experts, and the public about the future of cash. Recent studies states show cashless transaction volumes will increase by over 80% to 1.9 trillion by 2025 and that digital payments per person will triple by 2030.
The evolution of money as a payment method goes back to 5th century B.C. where what we know as coins today were first used. This transition from the old form of payment through bartering to the use of a universal payment method was industrialised in the ancient European continent in a region called Lydia where coinage manufacturing (minting) first took place.
Good governance encompasses the processes, practices, and policies that form the cornerstone of companies enabling leaders to responsibly manage their companies. Consequently, technology is mission-critical and crucial to the survival of a business.
With technology playing an important role in almost every aspect in the corporate life, one may question how it could help in enhancing corporate governance.
Information technology (IT) is an effective enabler for all sorts of business strategies, so it comes as no surprise that IT is useful for implementing a firm’s CSR initiative. There are many technological practices available that are targeted at improving the impact of CSR. Technology remains the basic driver of societal development, but growing social expectations place new demands on technology developers of responsible and sustainable technologies that could adequately support the solution of social issues in modern society. Technology can help businesses to adopt a more coherent and integrated reporting framework. Through technology, companies are better placed to include detailed data on their supply chains and regional operations, providing a more comprehensive picture of their corporate sustainability and compliance. Consequently, technology allows businesses to explore and benefit from the interconnections between organizational strategy, governance, and economic performance. For example, Google is using its technology to tackle education inequality worldwide. The company has supported the creation of an open-source platform that translates books into local languages spoken in smaller communities around the world (Rico). Therefore, investors want to be associated with companies that have a long-term strategy to sustainably operate and maintain harmonious relationships with their stakeholders. There is a huge potential for technology in strategizing, planning, managing, and reporting CSR programs. It has the potential to impose great impact. For companies looking to break away from the traditional way of doing and managing CSR, technology is regarded as a game-changer in the long run. These plans and strategies have the rationale for choosing the causes to support, beneficiaries, and locations to focus on and modalities of monitoring and reporting based on their previous learning and data analytics. Technology could play a bigger role in enhancing CSR since tech platforms can bring greater transparency by bringing all the relevant stakeholders on one plane. Technology can help in prioritizing CSR expenditure by aligning them with the needs on the ground and helping choose the right partners at the planning stage. Additionally, CSR strong planning is a very important step that can be done by introducing various tech platforms. Tech based monitoring of CSR programs provides eyes on the ground and direct access to beneficiaries which paper-based monitoring cannot. CSR and Innovation are the foundation of business competencies. These two elements help companies to create value and new ways of operations that may be more efficient in resource utilization and will benefit the company in the long term. References: John Riccio, How big tech is giving back to society, https://www.pwc.com.au/digitalpulse/tech-philanthropy-industry-giving-back-society.html. María I. González-Ramos* , Mario J. Donate , Fátima Guadamillas, “Technological Posture And Corporate Social Responsibility: Effects On Innovation Performance”, http://www.eemj.icpm.tuiasi.ro/pdfs/vol13/no10/Full/9_665_Gonzalez-Ramos_14.pdf. Goodera, “Technology as a game-changer for CSR”, https://goodera.com/blog/csr/technology-as-a-game-changer-for-csr/. Author Fabara, Carolina
With the help of software developed by a number of tech companies like INTELEX, Greenstone, Accuvio and Navex, companies can now easily manage their compliance with different ESG frameworks. These play a crucial role particularly since there are more than 400 ESG metric.
One of the positive roles Tech companies can play in enhancing Corporate Social Responsibility is through providing different tech solutions to help business, companies and multinationals measure CSR related metrics. Tech companies developed software to help manage both, internal and external, Environmental, Social and Governance reporting.
Traditionally, Corporate Social Responsibility has taken the form of self-regulation expressed in initiatives or strategies undertaken by the organization depending on its goals. For instance, technology companies have proven that they are the ones that connect those in unserved and underserved populations across the globe.
The book titled Corporate Social Responsibility (CSR) and Law in Africa, is a timely contribution to literature in this era, with regards to the role of corporate law towards promoting sustainability in Africa. The book is a rich source of knowledge in understanding how CSR can be embedded in the governance of firms and provides a framework to achieve this.
As companies are increasingly fighting to gain portions of the markets they compete in, they actively seek ways to attract more customers. One of the ways companies opted for to attract more customers is through giving back to the communities in which they operate, becoming more culturally sensitive of the cultures they are working with and supporting the environment and small businesses in the markets they operate in.
Given the importance of board diversity and the increased social and corporate impact it has, it may not come as a surprise to see the increased inclusion of ethnically and gender diverse directors in big companies. It has been something that many corporations had taken pride of. However, examining how board diversity affected the tech sector is something that requires probing.
Diverse board members would bring different insights and crucial technical skills that could further improve the board’s functions.
As recent studies show a link between board diversity and corporate social responsibility (Feng et al; 2020), board diversity and inclusion is drawing more attention than ever. In addition to ensuring equality and representation, board diversity comes with a host of benefits for shareholders and stakeholders alike
Financial crime is one of the most common risks for many companies. Even though the causes of corruption can be diverse, one of the tools used to combat crime is through “whistleblowers”.
With the evolution of technology, a new reality has set in for its users as technology enabled economic crime. Cybercriminals began exploring new tech-centered avenues to engage with different forms of financial crime like fraud, money laundering, and corruption.
As the current health pandemic continues to affect our daily lives as consumers, employees, businesses and investors, one may wonder what its impact has been on financial crime. Has COVID-19 contributed to the increase in financial crime (particularly in the digital sphere)?
The whistle-blower is a controversial figure who is regarded as either a hero or a traitor. In recent years, the public perception of the whistle-blower has changed and he or she is a more accepted figure. This is the result of the enactment of key legislation as well as the role of the whistle-blowers in uncovering global scandals such as the Panama Papers or Luxleaks.
The Need For Reform Of The 1990 Nigerian Companies Act On Corporate Social Responsibility (CSR) Practice In Nigeria
In an era of financial crises, widening income disparities, and environmental problems linked to companies operating in developing countries like Nigeria, calls for greater corporate social responsibility (‘CSR’) are increasing rapidly around the world.