As discussed in the first of this two part series on corruption and fraud in the supply chain, in certain countries such activities are not only tolerated, but actively encouraged. Since July 2011, the tough new Bribery Act has bound UK businesses by a set of ethics which expressly forbid kickbacks and the like, regardless of whether the recipient is based in Britain or not.
Bribery and corruption have a number of negative effects on a business and so should be avoided. Here are five tips to weed corruption out of your own supply chain.
1. Keep up to date with legislation
Stay in touch with corruption legislation domestically and abroad to ensure that your business remains compliant. You should also carefully monitor general business practices in low governance countries with whom you deal in order to be able to identify procedures designed to encourage fraudulent activity.
2. Encourage whistle blowing
Your employees are the eyes and ears of your business and will quickly be alerted to corrupt practices. Implement a system by which staff can report issues confidentially and make them aware of how the system works and the protection your business will offer them. Ensure you act on any information you receive.
3. Make staffing changes as required
If you have concerns about account managers or people dealing directly with suppliers, do not hesitate to replace them. Any issues caused by the transition will be temporary and far less costly than a criminal court case for bribery.
4. Train staff to say no
Provide employees with guidance and training in how to recognise corruption systems and how to avoid them. It is also a good idea to provide basic training in anti-trust law and ethics.
5. Adopt an Anti-Corruption Policy
Sign a code of conduct agreement or adopt an anti-corruption to demonstrate that your organisation is serious in its intent to root our fraudulent business practices. Doing so speaks volumes to your employees, your suppliers and your customers.
Corruption is not easy to fight, but the five ideas listed above will give you a head start on removing it from your supply chain. Feel free to let us know if you have any others.
March 14, 2012 in
Supply Chain, Supply Chain Management