HO-Fair Governance Pilot Introduction
As part of strengthening and improving the Impact SME Development Programme (read strategy document) that Oxfam Novib is implementing, the team involved is launching 3 pilots to be implemented in the financial year 2019-2020, starting April2019. One of these pilot revolves around the topic of Governance # how is the business governed and how can that be done more fair and inclusive towards all stakeholders involved in the business.
Future of Business and Asia
The governance of SMEs is often simply designed bya founder/ manager with employees, and sometimes shareholders # which could be relatives and friends. New models are being designed, for example by the Future of Business Initiative (FBI) group at Oxfam GB. These models are designedto incorporate employees, suppliers and other stakeholders of the businesses, into the ownership or the governance system of the companies. Aimed to ensure or increase equitability of the business and fair business practices.
FBI has got good traction in Asia, which originated from an engagement during the WEF ASEAN in Vietnam, where a report was launched. This led to a research that is currently ongoing on #Identifying Transformational Opportunities to Scale Hybrid and Social Enterprises in Asia# whichaims to identify what Oxfam can do to help scale hybrid and social enterprise(SE) movement in Asia and make specific recommendations for action. This is led by OGB.
In Vietnam, the Impact SME Development Programme has been running for 4 years now, underthename of Enterprising for Development (EFD). The work with businesses is mostly done by local partner CSIP. Most of the businesses supported are social enterprises and/or have a strong social drive.
Why Fair Governance? Or more equitable business structures
Vietnam has shown strong economic growth but inequality has also grown and poverty-related challenges remain. This applies to ASEAN as a whole and has spurred the initiative towards inclusive growthand sustainable development. Responsible business practices provide opportunities for business such as attracting workforce, customers and investors that value this more and more.
The future is with hybrid and equitable business models, such as in social enterprises, co-operatives and fair trade businesses. These businesses have hybrid goals of financial sustainability and social purpose. Commercial activity for hybrid businesses is a means towards a social end, distinguishing them from CSR and shared value approaches where social goals are a means to protect and enhance commercial ends. Social entrepreneurship can be a viable way to create jobs, raise incomes and empower communities and deliver economic growth while also reducing income inequality, promoting women#s economic empowerment and reducingenvironmental impacts.
There are many businesses which are succeeding in lifting workers out of poverty, providing equal opportunities for women and men, sharing value more equally, and giving voice and power to the most vulnerable and marginalized communities. The case studies in this paper suggest that among the most important factors in determining the outcome for stakeholders are who owns the business, and in whose interest it is run. Business structures that seek to balance the interests and trade-offs of different stakeholder groups (such as farmers, employees, consumers) offer an alternative to shareholder-based models. Thesemodels can drastically improve the livelihoods of the most marginalized women and men. If applied to agriculture or the food system, this leads to a more equitable distribution of value in food supply, e.g. more value going to farmers producing the food.

Pilot objective
Develop and test a service package on #Fair Governance# targeting SMEs already part of the programme that helps these businesses identify and implement changes in their governance model that make the business more equitable and fair.
More practically, with the budget available of 40,000 EUR, identify a few SMEs out of the current or previous cohorts of Vietnam and test <(>&<)> learn about training, tools and consulting on governance. The output of the pilot being a service package, lessons learned and recommendations on how to bring this forward.
Assumptions to be tested in the pilot
- Businesses owners / entrepreneurs are interested to make their governance structure more equitable and fair
- Stakeholders involved in the business (employees, farmer-suppliers, consumers, local communities, others) are interested and willing to participate
- A service package (training, tools, advisory) can be deliveredthat helps businesses implement governance-related changes
- Fair governance leads to more equitable distribution of value generated amongst the value chain and amongst different stakeholders (women, men)