The five pillars of ethical procurement

Every organisation, including yours, needs to take ethical procurement seriously as any lapse not only…...
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Every organisation, including yours, needs to take ethical procurement seriously as any lapse not only reflects poorly on your business, it could also have a significant impact on the individuals working in your supply chain. As a procurement professional, it is your responsibility to ensure that all of your organisation’s goods and services are provided in a safe and ethical manner. The last thing you need is unfavourable coverage in the local newspaper about poor industrial standards.

If you don’t have the right processes in place, you will find it difficult to guarantee that your organisation upholds your ethical standards at every stage of the supply chain. Here are the five components that you should make sure to embed in your procurement processes.

1. Ethics policy

It is necessary to have a well-crafted ethics policy in place so that there is no scope for a dispute between your procurement officials and other departments. The policy should highlight what the top management believes is ethical and unethical. This will give a clear roadmap to follow, helping you to ensure that you stay within the boundaries prescribed by the policy.

2. Ethics training

When you have an ethics policy, the rules are etched in stone and cannot be altered or misinterpreted. However, you might be hard-pressed to make sure that every employee has spent time going through the policy and checking this against their current practices. Therefore, every organisation should make it a point that the procurement team undergoes regular procurement ethics training to make sure that the people responsible for your supply chain are aware of the best practices.

3. Ethics ombudsman

Procurement professionals within the organisation should be able to speak about genuine or possible ethical violations in procurement without fear of recrimination. Appointing an employee as an ombudsman will help with this as it will allow employees at every level to pinpoint questionable ethics in procurement displayed by more senior employees.

4. Checks and balances

Your organisation should have a policy wherein major procurement should be carefully reviewed by the management to ensure that all procurement guidelines are being followed and that there is no scope for ethical violations.

5. Internal audits

It helps to have periodic internal audits to check that all procurement procedures and processes are operating ethically. Audits also prevent unethical behaviour in procurement for the future.

Use these tips to make sure that your organisation enjoys ethical procurement every time you decide to source something.

Nick Ford

Nick has over 30 years procurement experience in consulting, outsourcing and line roles within industry with international experience across many sectors and industries and led many procurement programs with blue chip organisations.

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