Operating in Emerging Markets within Africa

As companies have realised that fewer business opportunities exist in a saturated domestic market, new business development has focused on emerging markets.

A recent review of emerging markets within Africa has identified nine countries that have already emerged; and a further ten classified as “up-coming emerging markets”.  Given the fact that many of these African countries have higher growth rates than many First World economies, it is not surprising that successful companies are looking to secure greater returns on their investments in these economies.

However, for companies interested in exploiting opportunities in African emerging markets, senior management needs to understand that areas of potentially high profits also pose equally high risks.  Senior management should consider how to mitigate risks and earn profits in a sustainable manner.  This risk reward ratio needs to be assessed for those emerging markets where key company personnel will be sent.

When operating in emerging markets, the risks faced are similar to those experienced in a Hostile Environment.  In fact, hostile environments exist in many emerging markets.  Emerging markets are undeveloped economies situated in countries which are often characterized by political conflict, high levels of corruption, weak law enforcement and extensive competitive malpractice.

By entering such markets, companies need to be aware of the potential damage to their reputations and financial bottom line.  More importantly, companies need to understand their responsibilities to their company personnel deployed to, or working in, these emerging markets.

The “duty of care” is a responsibility that company directors and officers have when making decisions about their employees.  The legal concept of duty of care presumes that employers have a moral, as well as a legal, responsibility and obligation for the security and safety of their employees.  Breaching a duty of care can give rise to a legal action, alleging negligence.  Such an action can result in a criminal prosecution of the employer and its senior management or a costly lawsuit claiming extensive damages.

As such, companies’ responsibilities cover a range of obligations which are best met by implementing a corporate personnel security strategy throughout the organization.  This policy should comply with existing elements of the corporate responsibility and ethics programme, developed by the legal department.

Even if a corporate personnel security strategy or travel security management plan has been implemented, the meaning of duty of care is inscribed in the business judgment rule that courts will not second-guess the business judgement of corporate managers.  Rather the courts will find that duty of care has been met if senior management carried out a reasonably informed and rational judgment without the presence of a conflict of interest.

The meaning of duty of care requires that the burden of proof lies with the plaintiff to prove that the standard has not been met.

Only you can be assured that your company satisfies the duty of care rule and that your legal team has clarified your corporate responsibilities, thus you need to consider how to secure the buy-in of your employees.

Whilst it is a good business practice to have policies and procedures in place that support your company’s definition of its responsibilities in respect of duty of care, your senior management must also demonstrate their commitment to duty of care.

One of the most effective means by which senior management can show that “they care” or demonstrate their commitment to duty of care is to place designated and key personnel on our three-day Hostile Environment Awareness Training (HEAT) course.

As a result of attending our HEAT course, your key personnel will understand the legal definition of duty of care. They will also develop the requisite preparedness attitude to operate in hostile environments with confidence.  Thereby, saving your money while generating profit at the same time.