Integrity requires that buyers secure ethics in their supply chain

Integrity requires that buyers secure ethics in their supply chain

As is well-accepted in the business community, buyers are responsible for what they source and who they source from - especially if that product or service is used directly to create their own product or service. Joel Borgquist, president of supply chain ethics consultancy ETiK, takes a look at the ethical role of the buyer in the supply chain.

Honesty and integrity

The buyer’s ethical responsibility in a supply chain relates directly to two quintessential principles: honesty and integrity, both of which are inseparable from all decision-making.

Integrity requires that buyers secure ethics in their supply chain, fulfilled in the buyer’s responsibility to maintain an ethical standard. Accordingly, honesty requires that buyers make informed decisions, gaining the necessary knowledge to guarantee that what they buy meets that ethical standard – and passing that guarantee on to who they sell to in turn. This is the buyer’s responsibility to verify. These two ethical responsibilities, of maintaining a standard and verifying it, are the foundation of ethical decision-making in supply chains and are at the core of good business.

The ethical standard must be affirmed by all parties, require clear actions, and must be attainable. It must also be applicable to all aspects of business engagement. With these elements in place, both the buyer and seller understand the expectations of the engagement and the resulting consequences of their actions. This creates a vital precedent for accountability.

Appropriate standards

Standards are only legitimate if they are practised. In writing alone, they are just words on paper with no real value within an organisation. Standards are also only legitimate if they are appropriate. The standard must apply to the product or service and address the ethical issues at stake, wherein the buyer and seller adhere to appropriate standards that secure ethical practice.

Verifying the application of the ethical standard is the second responsibility of the buyer – who must make an informed decision. An ethical standard requires that sellers be transparent and provide information confirming that they are meeting the standard. This should include third-party certifications, site visits, and documented reports. If there are any inconsistencies between the standard and its practice, those inconsistencies must be remedied immediately.

If a seller will not, or cannot, adhere to the standard, then they must be removed from the buyer’s supply chain. Due to availability of information, the size of the supply chain, and the amount of hands that products and materials may pass through, verifying ethical practices can be very difficult in some supply chains – for the buyer as well as the seller. This may mean at times that there is no appropriate seller to buy from who meets the ethical standard or the level of verification needed. In this situation, the buyer can maintain ethical principles by choosing a seller willing to take steps to improve its practices and that will eventually meet the standard on a timetable. In this way, the buyer is contributing to positive growth. However, this process must be transparently presented to those who the buyer will eventually sell to, not alluding to the fact that the standard has not been met.

These responsibilities culminate to create an ethical framework wherein products and services can be ethically sourced, produced, and sold. This is essential to securing the future well-being of each member of the supply chain and is just as much the responsibility of the buyer as it is the seller.

About the author:
Joel Borgquist is the founder and president of ETiK, an organisation with a vision to bring ethics to the forefront of the globalised world. ETiK's work includes global site visits, transparency reporting, ethics certification, conflict resolution, and organisational development.
Borgquist has travelled extensively in various capacities throughout the world, including many emerging markets and disputed territories. He has experience in non-profits, intercultural communication, conflict resolution, and collaborative problem solving.