Brands

why your Start-Up needs a Conflict of Interest Policy

In 2015, we introduced the Conflict of Interest Procedure to our robust Compliance programme in TOTAL. It was a necessary procedure the company needed at the time to save us from unnecessary law suits and biased business practices. Today, I will discuss on how Conflict of Interest can help Start-Ups achieve good governance and systems.

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The Conflict of Interest Policy states that any situation in which the interest of an employee or of one of his Close Relation or friend conflicts or could conflict with those of the company, causing a risk of biased decisions being taken, it must be declared and an action must be taken to manage the conflict.

In Africa, Conflict of Interest has been relegated to a Legal Department issue and ignored in the operations of a company. It is mostly only stated during court proceedings, negotiation dealings or contracts however Conflict of Interest issues contribute to over 60% of dangers to businesses today. Lack of Conflict of Interest policies in workplaces has nurtured nepotism, sub standard products/services, fraud, law suits etc. And may I say this is partly why systems suffer in Nigeria today?

 

Let's consider a scenario, 

Your company has opened bid for contractors to handle a project and you are in charge. Your brother bids for this project and on the day of negotiation, you identify your brother in the negotiation process but even after you declare your conflict of interest, no steps were taken to isolate you from the process. Your brother wins because his company is the best fit however the other vendor who lost finds out that he was your brother and sues your company to court.

How do you plead? In this scenario, either your reputation or your company goes down with a huge fine slam.

Now, in the era of entrepreneurship and startups, we find entrepreneurs have ignored the importance of compliance in their business operations. The basic Start-Up kit includes Tech, branding, product/service, business development and marketing. When Legal comes in, its only about equity, company registration or shares. I've seen several startups built to fail from the onset because its structured around non-compliance procedures.

Conflict of Interest Issues affect recruitment of new team members, bringing on board qualified & best practice contractors, in-house fraud, bad company cultures, biased judgement among partners and public officials, law suits, sub standard products & services, over spending etc.

Here's a case study of a distribution and warehousing company

Company XYZ ran a successful business through imposed profit (buy-sell difference) sale and distributing commissions. The CEO's friend drove one of the distribution trucks but could not explain his fuel expenditure playing the age mate friendship card to avoid declaring it. On the other hand, another friend worked pro bono to manage the company in the CEO's absence however 'sometimes slept' with the receptionist in the CEO's house nurturing a late resumption time.

Now let's begin to calculate the loss Company XYZ has lost and the bad company culture that resulted. Finally both were sanctioned and sacked.

Recommendations

So how do you avoid Conflict of Interest in your Start-Up

  • Get every team member including yourself, the CEO, to sign a Conflict of Interest Form at least every year. Also, introduce a policy where each team member declares a conflict of interest once it arises.
  • Isolate team members from negotiations where they have potential conflicts of interests and introduce mitigation measures to vendors/partners who have a potential conflict either within their company or in relations to your company.
  • Have each employee sign a confidentiality form on behalf of the company.
  • Extend a tailored Conflict of Interest Form to your Advisory Board and Directors.
  • Train your team on Anti-Bribery Compliance including Conflict of Interest.

I personally wish that Nigerian Government would install a robust Compliance Policy into our Systems.

When in doubt, always seek advice from your Compliance Officer/Consultant.

4 Founders from Republic of Benin Disrupting Africa

Several weeks ago, I went backpacking to Benin Republic not for holiday but to discover its Business and Tech community. I connected with 4 young entrepreneurs in Cotonou who are disrupting the African startup space with very innovative products. I was impressed by their resilience to defy the odds in a closed economy and seek a market more diverse than their origin, satisfying a diverse demand with innovative products featuring unique African attributes.

Sarah, a young Beninese entrepreneur is the founder for PERLICIOUS, a handcraft brand dedicated to all things beads, corals and precious stones. She started out making handcraft beads specifically for men and with time expanded to female designs including complete jewel sets, beaded bags (which she produces with her team from Masai, Kenya), Wedding glam (which she produces with her team from Nigeria) and her newest line in beaded & stoned luxury fabric for occassional wears (sourced from Turkey, Senegal, Nigeria & Dubai).

In a bid to respond to a large demand from consumers outside Africa, understanding that Benin provided a limited resource base for her craft, she teamed up with experts from other African countries who had the skills needed for her product; training them and providing them specifics of what she needed to hasten mass production.

Perlicious is a unique brand in that each piece must feature at least 2 precious stones from 2 different countries in Africa. A necklace could feature black onyx from Nigeria, melted glasses from Ghana & a crystal from Czech Republic.

 

 

 

 

 

 

Her dream is not only to create a great Brand but also a global vision where Africa comes first and is revealed to the world. Sarah is a "disruptive diasporan", being a Beninese designer, sourcing raw materials from all parts of Africa, Turkey, Dubai. Her Brand is very diverse having her marketing manager from Ivory Coast, a Perlicious store on Etsy covering Northen America & Canada and a huge market in Europe. 

"It's important for me to mix the culture because you learn a lot by mixing cultures - Sarah"

She graduated with a masters from Senegal where she studied with mixed students from different continents equipping her with major teamwork skills. She has worked with several companies however discovered she loved being an Independent woman.

"My dream has never been to work for anybody. I prefer to work for my Clients. My Clients are my Bosses - Sarah"

Jean-Philippe is the founder of TRITON where instead of the customer to go to the car wash, the car wash comes to the Customer. It's a mobile platform saving the planet by decreasing the amount of water to wash a car by a third (20-30litres). Triton also started its own car-friendly bio-soap, providing jobs for community women. Triton has provided over 2500 car wash services in the past 8 months & plans to enter the market of big cities in Africa.

Jean-Philippe started the company because everytime he wanted to go out, he had to visit the car wash miles away & wait hours for his turn. For someone who lived in New York for years, he knew life was much easier than that. He thought "what if someone came to wash my car while it sat idle during work hours?"

Triton's mobile car wash services works through an app where a user books the nearest car wash tricycle or via whatsapp, giving your location & simply opening your car. His customer base targets majorly the middle class population who works & have no time to visit the carwash. Payments are done either thru mobile money or cash.

 

 

Thanks to his engineering background, Jean-Philippe's tricycles are very unique. A commercial tricylcle is broken down to bits and a new model is built from scratch. Each Triton tricycle includes 1000litres of water, a vacuum connected to an energy generation system created specifically for the mechanism, soap and towels.

Gladly, TRITON has no competitors in Benin but are there any competitors out there? I believe TRITON should franchise this platform because the African Continent & its cars need a saviour. Jean-Philippe plans to target Niamey, Ouagadougou, Bamako, Lome & Accra markets next.

Nadiyath KAFFO

Nadiyath is the founder of EWA OKE, a handmade craftwork company. Her Brand mixes leather and the popular "Aso-Oke" to make handmade goods like bags, belts, bracelets, travelling suitcases etc. She sources her leather from Morocco, Dubai & Italy and Aso-Oke raw materials from Nigeria. Her brand is widely known to mix both materials in very innovative designs and products. 

 

 

She produces her products with peculiar attention to quality, autheticity and poise. One of the challenges she faced were the demands from customers to recreate foreign designer brands which she refused by creating unique and classy products. Nadiyath's company is less than a year and her new line has began to make waves in a large market beyond Africa who are intrigued by the cultural fusion with modern designs and its longlasting durability.

Nadiya is interested in Nigeria, Ghana, Sengal, Cote D'Ivoire, Burkina Faso Markets. She encourages entrepreneurs to persevere and authentic in their work.

 

Tania Okanla, is the founder of A.M.T HOUSE founded in 2002. It is a platform dedicating to showcase African products online and has evolved into a product that sells Made in Africa "ready-to-wear" clothing lines. AMT House has two brands; one targeted to producing ready-to-wear clothing for target markets and install mass production centers for Made in Africa fashion brands produced by Africans in African cities.

Although Benin's market is not a real potential to consume "ready-to-wear" clothing, she is targeting a wider market in Africa in countries like Nigeria, South Africa and Kenya. She dedicated 1 year to train skilled talents in Cotonou's fashion industry due to lack of fashion schools, completing the value chain in Fashion from production, model training, photography, marketing, digital platforms, logistics and shipping.

"If Africa wants to be part of the global indsutry, we need to think mass market" - Tania

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