A Culture of Ethics

Most people are aware that accepting gifts from a supplier presents an ethical challenge, but what happens when it’s someone from another culture who presents you with the gift, and to refuse would be a significant cultural faux pas?

These challenges and other ethical dilemmas were discussed during Tuesday’s panel discussion, “A Culture of Ethics in the Marketplace.”

Consistent, clear communication is key to minimizing ethical risks, according to panelist Charlie Villasenor, chairman and CEO of the Procurement and Sourcing Institute of Asia (PASIA). In addition, he suggested, “Use technology to develop good compliance systems and best practices, and have third-party ethics auditors do regular reviews.”

A lack of lead time is a major cause of ethical-violation situations at Textron Systems, said director of procurement Mark S. White. Sloppy documentation occurs when people are in a rush; plus, they might skip steps along the way that could lead to trouble if the company were to be audited.

A few other risks mentioned in the panel:

* Employees might post something on Facebook or another social networking site that could compromise proprietary information– either intentionally, or inadvertently. Find a way to monitor supplier/buyer relationships on these sites if this is a concern.

* Back-door sellers: Employees who go to work for a supplier company after they are laid-off from your company. Again, this can bring intellectual property risks. Non-compete agreements signed upon leaving your company should include specific language to address any potential issues.

* Smaller companies (Mom and Pops) are sometimes undercapitalized and if things get bad, desperate times may call for desperate, unethical measures. By all means, not every small company will behave this way, but it should still be on your radar if you are working with a company that shows any signs of financial instability.

Ethical behavior starts at the lower rungs of the organization, with individuals following codes of conduct– as well as having appropriate reporting means should they encounter violations. “Ethical behavior used to be an expectation, but today it’s much more than that. It’s a requirement,” stated Steve Smiley, owner of Ghost Hill Logistics Inc. and Chair of the ISM Ethical Standards Committee.

ISM has prepared guidelines for the principles of ethical behavior to help its members navigate the choppy, unpredictable waters of ethics. Click here to access these guidelines today.

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