The Need for Better Business Associations

February 7, 2021 , Business Associations

Despite their crucial role in global and national affairs, business associations still remain oddly absent from public discussion, teaching and research into sustainable business performance and responsibility. This silence is strange because the business environment is one of the most dynamic and diverse realms of our society. Businesses are not a static entity that has evolved from its humble beginnings over centuries. Instead they are constantly evolving in response to the markets, customers and regulatory environments where they operate. In doing so they are subject to new demands and circumstances which invariably change the scope of their activities. As such the business environment has undergone tremendous changes in recent years and the need for business to business activities is no exception.

It is for this reason that the need for a treatise that addresses these changes is urgent. The need is also pressing because business to business activities are experiencing some of the fastest and biggest changes in global markets. This has created unprecedented opportunities and implications for corporate governance and the study of business to business association. The challenge is therefore to identify and create a frame of reference that can address these changes and develop the necessary strategies to meet them.

The failure to do so leaves business associations vulnerable to attack from within and without. Some argue that business associations should be encouraged to take on additional functions that create space for them within the broader context of business to business activities. Others argue that trade associations should be left to deal with issues that are not directly related to corporate responsibility. Yet the failure to acknowledge the existence and increasing relevance of business to business associations may provide an opening for attacks on those sectors that are seen as supportive by governments, international agencies and other institutions as part of the wider international economic governance agenda. Such attacks could undermine the credibility of business to business associations and the ability of those associations to maintain and enhance their own capacity to perform the services that they were designed to perform.

The failure to respond quickly and effectively to these challenges could undermine the ability of business to build and strengthen its capacity as an organization representative to civil society. The increasing role of business to business associations is an outcome of the increased role that such associations are playing in the development of economic policy. The increasing need for business to business associations therefore highlights the need for business to business association projects to be well planned, coordinated and led by industry bodies or by independent experts. These organizations must be well led in terms of their scope and mandate.

In this regard, a workshop organized by the World Trade Association (WTA) in 2021 on the challenges of developing a consensus on issues including dispute resolution, environment, intellectual property, sustainable growth and technology policy, was a significant contribution towards this effort. The workshop provided a platform for the discussion of key challenges facing business associations. In this process a consensus was developed on issues including: the need for more comprehensive solutions to issues such as dispute settlement; the need for greater institutional arrangements for the implementation of policies; the need for more comprehensive multilateral rules and mechanisms for the interaction of governments and businesses; the need for a better understanding of the benefits derived from trade and investment and the promotion of better relations between businesses and consumers. At the end of the session, a set of recommendations was released including a draft statement of priorities for business to business association planning. These recommendations focused on five key areas which needed to be addressed for a successful outcome of the association’s work.

These were issues such as: the need for a legal definition of the nature of business to be undertaken; the need for guidelines for the selection of candidates for important posts; the need for guidelines for the conduct of meetings; the need for guidelines for the conduct of negotiations; and finally, the need for improved monitoring and reporting mechanisms. There are a range of similar workshops that have been conducted by independent organizations that focus on issues related to business associations. The most recent one was organized by CPPI, formerly known as Chartered Survey of Shared Economies, and was attended by representatives from Pricewaterhouse Coopers, PricewaterhouseCoopers and IP Australia. The main outcomes of this meeting were the recommendation that all businesses should participate in a crossreferenced survey, and that business to business associations should define their own objectives and mission statement.