Why ethics in procurement matter

A couple of decades ago, organisations were only interested in making a profit. But that has changed and companies now also want to be good corporate citizens. Therefore, ethics in procurement has become essential in all organisations. Whether you are a new procurement professional or a veteran with years of experience, you should know that any unethical practices will not only damage your organisation’s reputation and brand image, but it will also have an adverse effect on your personal reputation in the industry.

While your organisation will attract penalties and fines, its reputation will be affected beyond repair. Remember, you want an organisation that is trustworthy and always does the right thing. So, CPOs and other procurement professionals should look out for unacceptable practices across their supply chain to ensure that they keep their organisation’s reputation and image intact.

Strategies to introduce ethics in procurement

As a procurement professional, it is possible that you are addressing ethics for the first time, which is why it is essential to have a strategy in place. It will help to prioritise issues and make them more manageable. Measures you can take include:

Review supply chains:When reviewing suppliers, check them for risk. This should be done for direct and indirect suppliers. Focus on human rights, modern-day slavery, and other employment issues.

Identify problem countries and areas:It is possible that certain countries, services, and processes could be high-risk. It is essential to identify them so that you can focus on areas with the highest risks.

Create a strategy:Once you have identified the key risks, it is time to create an ethical strategy. Collect the necessary information so that you can review it and prioritise the high-risk areas.

Remember, besides direct purchase, you also have to consider indirect spends that are not made by procurement. These maverick spends can result in unethical procurement without your knowledge. Review suppliers for direct and indirect spends, so that they adhere to the organisation’s ethical policy.