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Choosing an emerging destination for a meeting or event (M&E) is becoming increasingly popular. Countries such as Vietnam, Cambodia, China and India are now very attractive as hotels offer great facilities at competitive rates and access is becoming easier as transportation infrastructure is built to accommodate demand.
While there are inherent compliance concerns associated with organising events in such countries, there are some fairly simple processes that can be implemented in order to minimise risk.
Here are five strategies that companies can put in place to reduce risk when planning business events in emerging destinations:
1. Know your third (fourth and fifth) party vendors
In any business, the use of third party vendors can increase risk because control and oversight is outsourced to a certain degree. Having a robust vendor due diligence program is crucial to minimising risk.
The due diligence programme should be risk based because not all vendors present the same level of risk; risks vary depending on various factors such as scope of activity, risk level of jurisdiction and value of services. Having a third party due diligence programme in place to assess each vendor well in advance of the event, based on their unique profiles, can significantly bolster compliance efforts.
This is uniquely true in the M&E context. With most M&E activity, a significant number of downstream vendors are involved, well beyond the third party layer. Even the largest providers rely on downstream fourth and fifth party vendors to bring events to life.
It is crucial for any organisation to understand who these fourth and fifth party vendors are, and what level of risk they present. Where appropriate, due diligence should be conducted on these parties, many of whom will be based in the higher risk emerging countries.
2. Have a presence at your event
Having a trustworthy representative attend an event can improve compliance exponentially. Non-compliant behaviour naturally increases when events are unsupervised. In the past, there have been cases of unsupervised events for which invitees do not attend, but are nonetheless paid for their time.
This is not only a challenging management issue, but can even lead to Foreign Corrupt Practices Act concerns if the individuals who were improperly paid are government officials. With the simple control of having a trusted person oversee and supervise events, risk is reduced significantly.
3. Reduce cash
Compliance risks tend to increase with the use of cash. Cash is un-auditable and immediately transferrable. Wherever possible, it is advisable to avoid cash in favour of traceable payment methods, such as credit card or wire transfer.
That said, cash usage is occasionally unavoidable. In certain emerging countries, particularly in smaller cities, cash is still the primary method of payment. It is important to institute a robust cash management programme to plan how cash will be used, to whom it is paid, and how much can be spent on a daily basis. It is also important that all cash usage is supported by documentation, such as receipts, restaurant bills etc.
4. Contingency planning
Always have a solid contingency plan in the event of emergency (for example, political disruption or catastrophic weather events). In emerging destinations, such events are comparatively more common.
Contingency planning will not only protect the safety of meeting delegates, but will also minimise the need for unforeseen costs or payments. It is advisable to liaise with the meeting venue and/or delegate hotel to understand their business continuity and emergency preparedness plans.
5. Understand the local context and environment
It is important to have a good understanding of the local political and business context of a venue city. Understanding the latest policy considerations, visa requirements and political landscape is very important. In some cities, licenses may even be required for certain M&E activities.
Partnering with trusted travel management companies (and due diligence-approved third party vendors) can be an easy way for event planners to obtain important market information and satisfy legal obligations.
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