Corruption and Corporate Governance

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Welcome to Applied Corporate Governance and its report on Corruption and Corporate Governance

Corruption might be said to be, like the poor, always with us.

The relevance of corruption to corporate governance is clear. A well-governed organisation will not allow corruption either in external transactions or internally. Yet in many companies and indeed regions around the world bad governance and corruption is still endemic. In our quest to improve standards of corporate governance, we review global progress in fighting corruption.

A properly governed company with a strong ethical basis will steer clear of corruption, both in its external transactions and in its internal organisation and processes.

Still, there are many companies round the world which have some way to go before reaching a high standard of governance and there are many regions and countries in which corruption is endemic. So a brief review of global progress in tackling corruption would seem appropriate in our mission to improve standards of corporate governance.

Global overview of corruption

A recent survey of corruption was undertaken by Control Risks Group Holdings Limited, a global risk consultancy specialising in political, security and integrity risk. The exercise was titled ‘The Corruption Survey 2015/16’ and questioned 824 companies worldwide about business attitudes to corruption. A headline conclusion was that 41% of those surveyed said they had pulled out of deals primarily because of the fear of corruption. A crumb of comfort was that in the US, Germany and the UK, improvement was suggested by figures showing that companies with strong enforcement controls lost less business than before, illustrated by figures showing that in 2006 44% of companies lost business to corrupt competitors, but that figure was down to 24% in 2014. And 81% of respondents supported the introduction of international anti-corruption laws on the basis that they “improve the business environment for everyone”. It was felt that these laws made it easier for good companies to operate in high risk markets and acted as a deterrent to corrupt competitors, particularly in developing countries.

However, there were still wide variations in the degree to which company anti-corruption programmes were implemented and the survey suggested that companies needed to address the issue of incentives to blow the whistle on corruption. It seems that fear of consequences ranked well above recognition of company ethics to individuals contemplating corrupt behaviour. Similarly, financial targets were much more important than anti-corruption targets. Furthermore, companies were all too often assuming that the mere existence of compliance processes was preventing wrong-doing, and hence were not uncovering the reality by independently checking for corrupt activities.

Corruption and Corporate Governance

What are the rules?

Most countries have laws governing corruption and bribery, but it seems that the two most important laws affecting world trade in regard to corruption are the US Foreign Corrupt Practices Act and the UK Bribery Act.

US Foreign Corrupt Practices Act 1977

To quote the US Justice Department website:

The Foreign Corrupt Practices Act of 1977, as amended, was enacted for the purpose of making it unlawful for certain classes of persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person.

Since 1977, the anti-bribery provisions of the FCPA have applied to all U.S. persons and certain foreign issuers of securities. With the enactment of certain amendments in 1998, the anti-bribery provisions of the FCPA now also apply to foreign firms and persons who cause, directly or through agents, an act in furtherance of such a corrupt payment to take place within the territory of the United States.

What does the US Justice Department expect from companies? Steven Powell, co-head of forensics at ENSafrica, a South African law firm, is quoted as listing ten things the Justice Department usually expects to see in a company’s anti-bribery and corruption programme:

  • Commitment to compliance at the highest level;
  • Written and widely disseminated compliance policies – also translated into local languages where appropriate;
  • Periodic reviews and updates;
  • Independence and adequate funding;
  • Training and guidance;
  • Internal reporting mechanisms;
  • Investigations, including adequate resources and effective processes as integrity is very important;
  • Enforcement of policies and disciplinary measures for non-compliance;
  • Paying attention to third party relationships – examine these closely and sensitise third parties to the importance of compliance and show a willingness to terminate those agents and contractors who fail to comply;
  • Monitoring and testing.
UK Bribery Act 2010

This is described as

An Act to make provision about offences relating to bribery; and for connected purposes.

The explanatory short guide says:

Corruption and Corporate Governance

Key points are:

  • This Act deals only with bribery – not other forms of white collar crime
  • Your organisation may be liable for failing to prevent a person from bribing on your behalf but only if that person performs services for you in business. It is very unlikely therefore that you will be liable for the actions of someone who simply supplies goods to you
  • There is a full defence if you can show you had adequate procedures in place to prevent bribery. But you do not need to put bribery prevention procedures in place if there is no risk of bribery on your behalf
  • Hospitality is not prohibited by the Act
  • Facilitation payments are bribes under the Act just as they are under the old law

Hence the UK Government is likely to be focusing on:

  • Is there a set of appropriate procedures in place?
  • Is there top level commitment?
  • Is due diligence built into processes?
  • How effective are communication and training?
  • What procedures are in place for monitoring and reviewing?

Looking briefly around the globe at other regions:

European Union

An anti-bribery Directive of 2014 requires companies to disclose, amongst other matters, information on their anti-corruption efforts. It applies to larger companies with more than 500 employees, and by 2016 EU member states are expected to incorporate these provisions into their national laws. If a company has not adopted a programme relating to any of the subjects listed in the directive, it will be required to explain why.

Latin America

The OECD Anti-Bribery Convention of 1999, updated in 2007, has been ratified by Argentina, Brazil, Chile, Colombia, and Mexico, with Peru as an observer. The signatories to the Organisation of American States Inter-American Convention against Corruption 1996 comprising all the states of North, Central and South America and the Caribbean, will have incorporated the necessary amendments to their legislation and criminal codes to reflect their commitment to its aims. However, the test is the degree to which the good intentions are reflected in day to day practice. The Petrobras affair in Brazil points to the gap between theory and practice here.

Two reforms introduced recently and regarded as important are Brazil’s 2014 Clean Companies Act and Mexico’s 2015 National Anti-Corruption Commission.

Africa

To quote the United Nations website for the UN Economic Commission for Africa,

This Regional Anti-Corruption Programme for Africa is an initiative of the UNECA, Addis Ababa, Ethiopia, being undertaken in collaboration with the African Union Advisory Board on Corruption aimed at up scaling the fight against corruption on the continent with a view to ensuring a corruption free, better governed and economically prosperous continent. The United Nations Convention against Corruption (UNCAC) (2003) and the African Union Convention on Preventing and Combating Corruption (AUCPCC) (2003) constitute the main policy and political frameworks for the formulation of this programme, and its main objective is to facilitate the elaboration and implementation of these two frameworks on the African continent.

Individual countries have their own programmes and some have bigger problems than others. For instance, Transparency International lists Somalia as the most corrupt country in the world according to its perceptions survey. Overall, it’s difficult to see an overarching programme and maybe this is something that can only be tackled on the ground, country by country.

Corruption and Corporate Governance

The Transparency International Corruption Perception Index 2015.
Click on a country to see its score. The map can be moved by clicking and dragging with the mouse (or finger on mobile devices).

Asia

The Clifford Chance Review of 2014 appraises all the major countries of the Asia Pacific region and makes the point that countries vary in their legislation and enforcement practices. Criminal enforcement standards differ, as do levels of civil liability, which makes it important that companies should design their anti-corruption procedures carefully with local requirements in mind. Accidentally breaking a local law will bring its own penalties, but worse, may draw the attention of other international enforcement bodies.

The report stresses that corruption is obviously illegal everywhere and all the countries it covers have signed the UN Convention against Corruption, but the definition of corruption varies and it cites examples. For instance the Peoples Republic of China and Malaysia criminalise private sector bribery but Japan and Indonesia don’t. And bribing a foreign public official is a criminal offence in Taiwan but not in the Philippines.

Global Review of corruption

Having looked briefly at the anti-corruption initiatives around the globe, let’s now examine the evidence on the ground to judge progress.

USA

The Obama administration has taken steps to enforce the Foreign and Corrupt Practices Act in cases around the world. The website of the Dept of Justice lists all the actions taken over the years since 1977 against companies both domestic and foreign.

Some interesting figures are published in the FCPA Blog, which keeps a list of the top 10 FCPA enforcement actions of all time. The current list shows:

1. Siemens (Germany): $800 million in 2008. Bribed Argentine government officials to win government contract

2. Alstom (France): $772 million in 2014. Bribing officials in Indonesia, Saudi Arabia, Egypt, and the Bahamas

3. KBR / Halliburton (USA): $579 million in 2009. Led four-company global consortium that bribed Nigerian officials to win construction contracts

4. BAE (UK): $400 million in 2010. Paid $2 billion in bribes to Saudi Arabian ambassador Bandar bin Sultan in a multi-billion-dollar arms deal

5. Total SA (France) $398 million in 2013. Bribing an Iran official to gain access to oil and gas fields

6. VimpelCom (Holland) $397.6 million in 2016. Bribes to a government official in Uzbekistan

7. Alcoa (U.S.) $384 million in 2014. Corrupt transaction re Middle East company

8. Snamprogetti Netherlands B.V. / ENI S.p.A (Holland/Italy): $365 million in 2010. Bribed Nigerian officials to win construction contracts

9. Technip SA (France): $338 million in 2010. Bribed Nigerian officials to win construction contracts

10. JGC Corporation (Japan) $218.8 million in 2011. Bribed Nigerian officials to win construction contracts

And that is all separate from the US banks’ colossal domestic sub-prime lending to so-called NINJAs (no job, no income, no assets) which led to the financial crash of 2008.

Europe

In 2014 the European Commission reported to the Council of Ministers and the European Parliament the results of an investigation into corruption in the EU.

The report said that

EU Member States have in place most of the necessary legal instruments and institutions to prevent and fight corruption. However, the results they deliver are not satisfactory across the EU. Anti-corruption rules are not always vigorously enforced, systemic problems are not tackled effectively enough, and the relevant institutions do not always have sufficient capacity to enforce the rules. Declared intentions are still too distant from concrete results, and genuine political will to eradicate corruption often appears to be missing.

Its Special Eurobarometer gathered data, firstly on general perceptions of the prevalence of corruption and secondly on personal experience in bribery. The results varied greatly from country to country with less corruption actually being experienced in northern Europe but in all regions a much higher perception of corruption than incidents actually reported.

At the European level, more than 4 out of 10 companies considered corruption to be a problem for doing business, and patronage and nepotism were a similar problem. 50% of the construction sector and 33% of the telecoms/IT companies felt corruption was a serious problem for doing business. The smaller the company, the more often corruption and nepotism appeared as a problem and the country analyses showed that public procurement was particularly prone to corruption in the Member States.

Preventive policies reviewed in the study covered a wide variety of aspects including clear-cut ethical rules, awareness-raising measures, building a culture of integrity within various organisations, and setting a firm tone from the top in relation to integrity issues. Beyond this were effective internal control mechanisms, transparency, easy access to public interest information, effective systems for evaluation of performance of public institutions, etc.. However, there was a considerable divide among the different Member States concerning how they approached prevention of corruption. For some, effective prevention had contributed to a long-standing reputation of ‘clean countries’ with active and dynamic integrity and prevention programmes in place which were prioritised by most central and local authorities. For other Member States, corruption had been seen as a lesser problem for a long time, hence no active stance on promoting comprehensive preventive actions was taken.

Corruption and Corporate Governance

Latin America

The outflow of illicit cash from Latin America has been described by Frank Vogl, a co-founder of Transparency International, as a staggering tax on its citizens. And there is growing awareness of the scale, and resentment on the part of increasingly well-informed citizens at the economic cost to the economies concerned. At some stage in recent years, the leader of nearly every country seems to have been involved in some kind of financial scandal.

To give an idea of the impact, estimates by the Institute of International Finance, suggest that real economic growth in the region was an estimated 0.4% for 2014, reducing to 0.2% in 2015. Meanwhile, according to Global Financial Integrity, illicit financial flows out of Latin America are running at around an annual 3% of GDP. The real figure is probably higher since the calculations rely on published statistics and cannot capture the illegal data.

In terms of sheer scale, the corruption scandal around Brazil’s Petrobras is the largest in the country’s history.

Pressures are mounting on banks from public prosecutors and bank regulatory authorities regarding secrecy and in January 2013, HSBC, one of the world’s largest banks, agreed to pay a $1.92 billion fine to U.S. authorities for allegedly laundering Mexican drug cartel money into the United States.

Africa

Control Risks Group Holdings Limited, a global risk consultancy, published its Corruption Survey 2015/16 in which it expressed its opinion that corruption remained a major cost for honest companies in Africa with 34 percent of businesses reported to be losing out on deals to corrupt competitors. It said that

“Some 34 percent of respondents from Africa reported losing out on deals to corrupt competitors. Corruption risks continue to deter investors. 30 percent say they have decided not to conduct business in specific countries because of the perceived risk of corruption”.

However, it did report that companies were more willing to report suspected corruption in the award of contracts to the authorities than previously (60 percent in South Africa in 2015).  But Daniel Heal, Senior Managing Director East Africa at Control Risks, said: “Too many businesses are still losing out on good opportunities to corrupt competitors, or choosing not to take a risk on an investment or entering a new market in the first place for fear of encountering corrupt practices.”

Nigeria has been losing large sums from its oil revenues over the years and the former central bank governor Lamido Sanusi was sacked by then-President Goodluck Jonathan after suggesting that $20 billion in oil revenues had not been paid over to government by the state oil firm.

In South Africa a report by the trade union, Solidarity, quoted the Institute of Internal Auditors of South Africa as revealing that R700 million was lost due to corruption during the two decades following the end of apartheid. Dr Eugene Brink, senior researcher at the Solidarity Research Institute, said “It is impossible to quantify the actual extent of corruption in South Africa as much of the corruption takes place unnoticed and unpunished.”

It quoted a Corruption Watch report in 2013 that referred to mismanagement of public funds and abuse of resources by officials at local government levels and declared local government to be the most corrupt institution in the country.

Middle East

A PwC survey quoted by the Financial Times in 2012 suggested that Middle East business leaders were almost twice as likely as their global peers to say that they expected to face bribery and corruption (39% of their local interviewees compared with a global average of 23%). Depressingly, the study found that the most common means of detection in the region was “by accident”.

A more recent survey, published by EY in 2014, summarised its findings as follows:

As Middle East economies have developed and become increasingly sophisticated, so too have the methods of committing fraud in the region. Despite high profile efforts by governments to combat fraud, bribery and corruption, they remain common in the Middle East. Management boards of organizations vary widely in their approaches to stamping out fraud. Some companies appear willing to tolerate fraud. Bribes, particularly in the form of kickbacks, are still regarded as an accepted part of doing business in the Middle East, often with little thought for potential to corporate reputation damage. When fraud is detected, companies in the Middle East often prefer to deal with it internally, for fear of losing face.

EY-corruption-in-the-middle-east

Source: EY Bribery, Corruption and Fraud in the Middle East Survey

Dubai launched an anti-corruption drive in 2008, particularly looking at the property and finance sectors, and the change of regime in Egypt resulted in corruption investigations into deals carried out during former president Hosni Mubarak’s rule.

Corruption and Corporate Governance

Asia

A 2010 survey by Hong Kong based consultancy PERC (Political and Economic Risk Consultancy) named Indonesia as the country voted most corrupt in Asia Pacific. Following up were Cambodia and Vietnam, followed by the Philippines, Thailand, India and China. The least corrupt countries were Singapore, Australia and Hong Kong.

According to Transparency International’s global corruption index, 43% of the people surveyed in Indonesia thought corruption had increased between 2007 and 2010.

As in other parts of the world, the economic downturn following the 2008 crash made lots of people much worse off and made them all the more conscious of the corruption around them and the adverse effect it was having on their countries’ economies.

In China, corruption is perceived to cast a negative shadow over business dealings, though after President Xi Jinping assumed office, he launched an extensive anti-corruption purge which has resulted in thousands of arrests.

At an early stage, the railway minister was fired over allegations he received huge bribes when handing out contracts for the country’s new high-speed rail network. It was reported that he allegedly embezzled more than 800m yuan ($121m).

Jan Toporowski, chair of the department of economics at the School of Oriental and African Studies says that “It’s typically the government priority investment sectors that tend to be associated with corruption….What we saw with railways in China is that the government has attached huge importance to infrastructure development. They are willing to pay for rapid infrastructure development. In that situation anyone who can promise that speed gets the money”.

In India, the telecommunications industry is under investigation, after reports that second-generation (2G) spectrum licences were awarded to major companies for a cheaper price. Analysts estimate about $40bn was lost in revenue for the Indian government.

And in Malaysia the prime minister is under attack regarding a payment of $680m which is said to have been paid into his bank account by the Saudi royal family.

The Asian Development Bank says that corruption, and weak governance in general, undermines government revenues, results in poor infrastructure and hinders the pace of poverty reduction in Asia.

What guidelines exist in tables of performance?

Transparency International has published since 1995 a Corruption Perceptions Index about which it says

Each year we score countries on how corrupt their public sectors are seen to be. Our Corruption Perceptions Index sends a powerful message and governments have been forced to take notice and act.

Behind these numbers is the daily reality for people living in these countries. The index cannot capture the individual frustration of this reality, but it does capture the informed views of analysts, businesspeople and experts in countries around the world

Regarding its 2015 survey, it says

2015 showed that people working together can succeed in fighting corruption. Although corruption is still rife globally, more countries improved their scores in 2015 than declined.

Some countries have improved in recent years – Greece, Senegal and the UK are among those that have seen a significant increase in scores since 2012. 

Corruption and Corporate Governance

Others, including Australia, Brazil, Libya, Spain and Turkey, have deteriorated. 

A lesson Transparency International draws from its research is that some of the top-scoring countries in terms of “clean” public sectors are sometimes caught condoning corruption in the foreign countries in which they have business interests. It quotes the example of Sweden, number three in the index. A firm 37% owned by the Swedish state is accused of paying millions of dollars to bribe officials in Uzbekistan, which comes 153rd in the index.

What lessons do we at Applied Corporate Governance draw?

The lessons for corporate governance which we can draw from the above brief survey of global corruption are several:

  • firstly, as the EU Commissioners say, an active approach to prevention, setting the tone from the top, is the way to head off corruption and ensure good corporate governance.
  • secondly, it confirms the first of our Golden Rules of Good Corporate Governance, that there must be a strong ethical basis to a company’s business which dictates its culture and which respects the societies and cultures in which it operates. This ethical approach must run through the company from top to toe
  • thirdly, it’s not enough to be ethical at home; ethics must permeate out to the furthest geographical reaches and deepest roots of the organisation
  • finally, compliance isn’t enough; companies are warned by these surveys that they must not rely on having compliance routines in place, but must check the reality on the ground. We would say this is exactly what our Survey approach is all about and why we have always advocated including an ethical review as a key part of these regular surveys.

This article has been supplied by Applied Corporate Governance: Authors and Co-Owners Nigel and Arthur Kendall.

The ACG Report – CG Review

Should you wish to know  ore and how to become a member please contact me.

Dr Michael J Freestone. FCIS. FCIBM. DBA.

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16 Plus Golden Rules To Immediately And Massively Grow Your Business

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16 Plus Golden Rules To Immediately And Massively Grow Your Business

Introduction
Some of these 16 Rules are based on the results of marketing surveys covering over 60,000 advertisements and promotions. In other instances over 105,000 selling words and sentences have been tested on over 18,900,000 customers, to come up with the most effective sales principles. These rules have sold many millions worth of products. And they will sell millions more in the future.
No matter what you are selling, you are selling to people. Your customers all eat, sleep and have problems with their kids, wife or husband. They probably want to work less, look younger and need to lose a bit of weight and exercise more. In other words – they are human beings like you and I. Human nature doesn’t change. That’s why the rules below will apply today as they did 10, 30, or even 80 years ago.

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Golden Rule:1
It is 5 times easier to sell something
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The easiest way to sell something else to your existing customers is by using the telephone or by sending them a letter. I’ve been accused of focusing too much on selling by Direct Mail . . . but it is by far the most efficient way for you to get more business. Your past clients are a “hot buyers” list. All you have to do is ask them to buy something else. And it doesn’t have to be your product either. You can offer them someone elses products. Thus, an accountant can offer financial services. A restaurant can send invites to a clothing sale. A car exhaust centre can promote a motor mechanic. A plumber can refer an electrician. And so on.

Golden Rules To Immediately And Massively Grow Your Business.

 

Golden Rule:
If you have an established business 70%
of your advertising money should be spent
on re-selling to your existing customers.
Why? See Rule No.1. And yet I see most businesses spend thousands in the media trying to get new business – only to forget all about those people after they buy. If you were to send out some thank you letters instead, or call your customers and ask them to buy again, you’d see an almost magic increase to your bottom line. Done correctly, this always works better than chasing new customers. Listen, next time you are going to run a full page ad in the newspapers promoting a sale or whatever, try this: Reproduce the ad and send it to your existing clients. Attach a note saying . . .
“I thought you may want to see this, come in the day before to get your best pick of the bargains. Regards….”
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7 Step Business Diagnostic for the CEO

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My Journey to the development of the 7 Step Business Diagnostic for the CEO really started with Malcolm Baldridge. The change of my Business Path.

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The 7 Step Business Diagnostic for the CEO/Founder/Owner was developed to help CEO’s identify where there are blockages in the business that are stopping the execution of the Business Strategy growth and profits. It works extremely well and helps to forecast future profits based on answers to the 7 sections. 

It is a proprietary tools developed by Dr Freestone since 2004 and has since then helped hundreds of CEO’s get a complete understanding of their business using the concept of excellence. Excellence in business is paramount to full attainment of the Vision Mission Goals and Objectives. 

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While all attempts have been made to verify information provided in this publication, neither the Author nor the Publisher assumes any responsibility for errors, omissions, or contrary interpretation of the subject matter herein.
This publication is not intended for use as a source of legal or accounting advice. The Publisher wants to stress that the information contained herein may be subject to varying state and/or local laws or regulations. All users are advised to retain competent counsel to determine what state and/or local laws or regulations may apply to the user’s particular situation or application of this information.
The purchaser or reader of this publication assumes complete and total responsibility for the use of these materials and information. The Author and Publisher assume no responsibility or liability whatsoever on the behalf of any purchaser or reader of these materials, or the application or non-application of the information contained herein. We do not guarantee any results you may or may not experience as a result of following the recommendations or suggestions contained herein. You must test everything for yourself.
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4 Reasons Young People Should Become Entrepreneurs

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4 Reasons Young People Should Become Entrepreneurs

Unemployment got you down? Just graduated with student loans, but can’t find the right job? Well, you’ll be happy to know that there are more new business startups in the United States-South Africa and in the World – than ever before. And, you can create your own job by starting a business, on a budget, doing what you love and what you’re good at — i.e., your passion and expertise.

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Here are 4 reasons why you should start your own business as a young entrepreneur:

 

1) You’re not a good employee and don’t like working for anyone else then read on.

2) It’s easier than ever to become an entrepreneur, and technology has a lot to do with it. You’re a tech-savvy millennial, and Internet and mobile technologies make it easier to connect and identify with people based on shared values and ideals. At the same time, as technology has connected us, people have become very comfortable with online shopping through sites like Amazon, eBay, and PayPal, which have become very popular.

3) You’re thinking about leaving your day job to pursue your passion full-time. As a young, aspiring entrepreneur, focus on how that passion is going to help other people. How is what you love to do useful to others? It’s not just about innovation and disruption, but think about how you can serve people and really bring them value that makes their lives better.

4 Reasons Young People Should Become Entrepreneurs.

4) You know how to use social media marketing to reach lots of people quickly. Go ahead and put your idea out there as quickly as possible. Define your product or service, the customers it’s intended for, a way to process payment, and the price. Then, go viral.

All entrepreneurs wonder if their companies will succeed, but you don’t really know until you try. So, do it while you’re young and have little or nothing to lose.

If you need any further information on getting a standard business plan for R500 as a template contact me.

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Branding

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Welcome to our daily post today on Branding.

Today

SAY OF THE DAY

“Ideas are a dime a dozen. People who implement them are priceless.” – Mary Kay Ash


Branding

Why Entrepreneurs Need to Create Their Own Brands

Why Entrepreneurs Need to Create Their Own Brands At some point in your career, someone has probably talked to you about how to brand yourself, how personal branding is this incredibly important thing that everyone is doing these days, how, if you’ve built a business and are trying to grow, it’s not something you can ignore. Or is it?

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Personal branding, just like regular branding, is something that’s often completely out of your control. If you’re trying to brand yourself as something you’re not, it’s very difficult, if not impossible.

And, when you’re already running a business and busy with the day-to-day grind, when you’re associated heavily with the business you run, it often can seem like a waste of time to focus on personal branding.

But personal branding isn’t just about getting a logo, a business card, and a fancy email header – it’s about who you are, what you do, how you do it, and the business that you run, and it can be a valuable tool to generate new leads and to close sales.

Jeff Bezos famously said that your brand is “What people say about you when you’re not in the room,” meaning that, for all your intentions, for all the work and effort you put into trying to brand yourself as a particular thing, what ends up mattering most is what people think about you.

Branding.

And that’s based largely on your actions, what you’ve done with your business, and what you say. There’s not a whole lot you can do to change that. You are who you are, you’re not likely to change any time soon, and you can’t take back or reverse what you’ve said or done in the past.

Ask any politician, and they will happily tell you that, no matter how hard you try, you cannot brand yourself as something different from what you are.

Now, that being said, you certainly can build a personal brand that is true to who you are, and that’s generally what most business owners do. But what many fail to realize is that the personal brand is necessary in the first place – they often think that, because they own a business and have spent a great deal of time and money building it into a brand that they don’t have to worry about branding themselves. And that’s just not the case.

One major reason you need to brand yourself is to help grow your business. If your business is not well known, if it’s not a household name, it doesn’t mean a whole lot to introduce yourself as the CEO of XYZ Corp.

One of the greatest ways to get in front of new clients and introduce them to you and your business is through speaking events and live workshops or presentations, but your 5 years as CEO of XYZ Corp might not be enough to get you in the door.

However, if you position yourself as, say, a talented WordPress developer, designer, and writer who has been in the WordPress world since day one and who has worked in web design and development for 20 years (and who also happens to be the founder and CEO of XYZ Corp), then you might be more likely to secure these gigs.

Having a personal brand matters, too, when large potential clients are researching you, and the way you brand yourself can play a large role in closing a sale.

They don’t care that you’re just the CEO of XYZ Corp, which they may or may not know very well, but they care more that you, personally, know what you’re doing, have experience, and can handle the project for them, whatever it happens to be.

Branding.

The same is true in the B2C arena. As a business grows and begins to make strategic partnerships, along with larger and larger deals with larger and larger clients, they will naturally look to the CEO and ask “Can this person handle what we’re needing? Who are they? What is their background?”

You need to have an answer to that question. If there’s anything true in life, it’s this – things always change. I’m not in any way implying that your business is going to fail; there are many other reasons that someone would stop running a business.

For instance, you might sell off your business and start consulting. You might turn over your business to a partner, a spouse, a board of directors, or a former employee and start a new business. You might take a much smaller role for a period of time – you never know how it might go down. But, through all of that, the business brand that you’re associated with is going to change, sometimes markedly.

Businesses do fail, but plenty of wildly successful titans of industry have struggled through the failure of a business (or two, or three) only to come out stronger than ever before. While their fortunes and their personal brands were tied to the companies that failed, that was momentary, and they went on to show that they were not their company (and their company was not them).

These reasons and more are why it’s so critical for you, as a business owner, to brand yourself – your business and your employment status may change drastically over time, but you will change a lot less.

Setting aside the business you’ve built and its success or failure, people are interested in your skills, and those skills need to be articulated clearly and effectively to potential business partners, investors, and clients, regardless of your current standing as president or CEO.

To brand yourself effectively, you have to do the same things you would do for a business brand.

  • You need a logo, a color scheme, a website, professional social media profiles – the collateral that outwardly displays a brand.
  • You’ll also need a tagline, some content that describes who you are and what you do. Depending on your business and what you want to do with that in the future, you may need to remove certain pieces of collateral, like the website, or keep content light and supportive of your company and current role, or even just focus exclusively on the design portion of your personal brand and a simple tagline.

If you’re not sure exactly how to position yourself, if it’s hard for you to separate yourself from your business, a brand persona template may be just what you need to get started, to dig into your personality and pull out who you are, what you stand for, and how that translates into the personal brand that you present to the world.


Should you need help in this area contact us.

Contact us for a Branding Discussion on Skype mfreestone5209

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My Business Health Check is used to check companies who have dysfunction, conflict and disjointed application of processes in them. It actually works very well. Again, I modified a spreadsheet from one of my IIB Colleagues bringing in the concept of excellence into it and eventually ended up with 200 questions in 7 sections that identified Your and especially Your staffs’ responses. The results are plotted against a perceived Excellently balanced Company. The variances in companies are vast and the graphics point this out starkly. THE TOOL IS EXTREMELY USEFUL!

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If you wish to buy a 7 Step Business Diagnostic for the CEO is on Special Offer at  $30/R358 via PayPal. (Normally $50.00)

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7 Step Business Diagnostic for the CEO

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