Supplier ethics overlooked by nearly 80% of firms

15 November 2007
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15 November 2007 | Antony Barton

Almost eight out of 10 companies omit suppliers from their compliance and ethics programmes.

A survey of 108 "Global 2000" companies, which covers the world's corporate giants, found 78 per cent do not include suppliers in their company's code of conduct. And 58 per cent do not regularly assess compliance risk in their supply chain.

Richard Cellini, vice-president of US-based ethical adviser Integrity Interactive, which conducted the research, said principled internal practices alone were no longer enough.

"Enterprises are being judged by the company they keep, which means the whole supply chain must be ethical. If a dishonest supplier 6,000 miles away disregards manufacturing standards to make more profit, it reflects on the US company that hired that supplier."

He recommends companies:

- Make ethics and compliance a factor in supplier selection - Create and maintain profiles of important suppliers' ethical history - Assign employees to monitor the ethics and compliance of major suppliers - Assess supplier ethics on a regular basis - Categorise suppliers by importance and ethics risk

SMnov2007

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