Concluding the previous two articles on the use of environmental and social leverage to initiate sustainable internationalization pathways, Governance issues also need a closer look with respect to the international context.
In this in-depth study, therefore, we discuss Governance and Internationalization.
Governance: an (as yet) understaffed lever
Compared to the other two levers, Governance is still the one that has received the least attention in the implementation of initiatives or plans aimed at implementing sustainability strategies. On the contrary, it is probably the most “bureaucratic” aspect of all, precisely because it concerns those mechanisms of guarantee and protection towards their stakeholders that companies can (or must) adopt from a sustainable governance perspective.
This is a very complex issue for SMEs, which through this leverage actually commit themselves to their stakeholders, a very wide audience ranging from the company’s employees to the community of the area in which it operates, equipping themselves with a virtuous system of rules aimed at protecting their interests.
Governance, internationalization and the 2030 Agenda
With reference to the SDGs made explicit in the 2030 Agenda for Sustainable Development and referring to Governance issues, we can identify the following:
- Initiatives aimed at local economic development (SDGs 8 and 9)
- Initiatives aimed at raising awareness of the critical use of resources (SDGs 11 and 12)
- Initiatives aimed at community welfare including at the international level (SDGs 16 and 17)
Wanting to focus attention on what different countries around the world have achieved on the various issues, the data published by the UN last June 2023 in its annual report on the advancement of the 2030 Agenda goals provide us with an interesting overview of the paths taken by individual countries and, more generally, of the situation in global macro-areas. Below are some concrete examples.
Economic development of the territory (SDGs 8 and 9)
Among these areas, the one on which there is currently the most interest is related to innovation and infrastructure development, where many Eastern countries, including Russia, India and China, are achieving important results. A somewhat similar situation also concerns North America, where the most virtuous states are the United States and Canada.
On the other hand, with regard to initiatives aimed at the protection of workers’ rights and economic growth in reality many countries around the world are still struggling, with some particular exceptions such as the United Kingdom and Oman where the trend of improvement is positive.
Raising awareness of the critical use of resources (SDGs 11 and 12)
There is growing attention on this issue by many countries around the world, both in terms of promoting sustainable production and consumption models (SDG 12) and in terms of promoting and disseminating new “smart” models on which to base territorial and community development.
In particular, with regard to the first aspect, the most virtuous countries are in the western part of the world, where South America with Brazil, Peru and Argentina have registered an important trend of improvement in recent years. On the development of new smart cities, on the other hand, many European countries have been investing for some time in order to achieve their goals, but China, Saudi Arabia and Australia are also delving into these issues.
Wellbeing of the international community (SDGs 16 and 17)
This is something that companies can do relatively little about, other than to adopt codes of ethics that support the issues addressed related to peace, justice, and developing partnerships to facilitate international economic development.
This is therefore a very broad topic that becomes complicated for SMEs to address, although everyone, in their own small way, can always decide to make a contribution in support of these issues.
Final thoughts
The Governance dimension certainly remains the most complex aspect for SMEs to address in thinking about sustainable internationalization strategies. Indeed, it is often a matter of participating in initiatives or programs that can be carried out by networks of companies or in forms of partnerships that, by bringing together a critical mass of companies, can actually give rise to initiatives that respond to the international issues described.
In any case, this is an important issue, especially when it comes to investors or the company’s key internal stakeholders, whose needs can inform the construction of internal codes of conduct that meet the requirements of sustainable governance and still remain impactful for the stakeholders they are aimed at even in the international arena.
As always, however, it is important to do so with awareness and proceed methodically. We at Roncucci&Partners have been helping Italian SMEs face the challenge of foreign markets for more than 20 years and, today as then, we are able to structure an organic internationalization path that also takes into account the sustainability dimension depending on the destination countries.
At Roncucci&Partners we help companies develop themselves and their business, embrace change and evolve to thrive in a world that is increasingly complicated, insidious and requires great expertise. We do this by applying punctual methods and rigorous strategies, the result of many years of experience and the richness of the numerous success stories we have conducted all over the world. Passion and method are indeed our guides to enhance the present and build the future.
