CPO Strategy

The Significance of Ethics in Procurement and Supply Operations

Eman Abouzeid, Global Procurement and Supply Chain Professional, discusses how important ethics and CIPS’ code of conduct is to fellow industry professionals

This article first appeared in August’s issue of CPOstrategy – read the full magazine now!

Understanding ethics and exercising good ethical behaviour are vitally important areas within the procurement and supply profession, and the procurement professional should always disclose any potential conflict of interest and follow the advice given from a person in authority.

In this article, I am demonstrating the importance of the CIPS code of conduct in procurement and supply management and outline the actions and behaviours that all CIPS members must follow, as CIPS code of conduct promotes the adoption of ethical processes within procurement and supply, and encourages individuals to raise any concerns regarding unethical behaviours with a person of authority within the organisation.

CIPS is the global leading organisation serving procurement professionals. As such, CIPS has a code of conduct that all CIPS members are expected to follow. The code is current and reflects modern business environments.

The purpose of this code of conduct is to define behaviours and actions which CIPS members must commit to maintaining as long as they are members of CIPS.

Member of CIPS worldwide should encourage their organisations to adopt an ethical procurement and supply policy based on the principles of this code and raise any matter of concern relating to business ethics at an appropriate level within their organisations.

Let’s briefly survey and explain the different sections of CIPS code of conduct, in order to define what are the behaviours and actions that CIPS members must commit to maintain.

Enhancing and protecting the standing of the profession

This part of the CIPS code of conduct is to do with how a procurement professional should always operate in ways that both enhance and help to protect the standing of the profession. Furthermore, it ensures that CIPS members should act in a professional way in both their working and personal life, and they should always operate in accordance with their organisation’s policies while being mindful of the profession they are representing – this part of the code of conduct includes the following practices:

  • Never engaging in conduct, either professional or personal, which would bring the profession or the Chartered Institute of Procurement and Supply into disrepute.
  • Not accepting inducements or gifts (other than any declared gifts of nominal value which have been sanctioned by your employer).
  • Not allowing offers of hospitality or those with vested interests to influence, or be perceived to influence, your business decisions.
  • Being aware that your behaviour outside your professional life may have an effect on how you are perceived as a professional.

Maintaining the highest standard of integrity in all business relationships

Integrity is about being honest and ethical, and working to or portraying conduct which reflects strong moral values. This part of the CIPS code of conduct outlines why a CIPS procurement professional should maintain a high standard of integrity within business relationships, and includes the following principles:

  • Rejecting any business practice which might reasonably be deemed improper.
  • Never use your authority or position for your own financial gain.
  • Declaring to your line manager any personal interest that might affect, or be seen by others to affect, your impartiality in decision making.
  • Ensuring that the information you give in the course of your work is accurate and not misleading.
  • Never breaching the confidentiality of information you receive in a professional capacity.
  • Striving for genuine, fair and transparent competition.
  • Being truthful about your skills, experience and qualifications.

Promoting the eradication of unethical business relationships

Ethical behaviour is very important within procurement, procurement professionals can help eradicate unethical behaviour through not creating or maintaining a relationship with businesses that do not promote good ethics – Such eradication of unethical business practices is done by the following practices:

  • Fostering awareness of human rights, fraud and corruption issues in all your business relationships.
  • Responsibly managing any business relationships where unethical practices may come to light, and taking appropriate action to report and remedy them.
  • Undertaking due diligence on appropriate supplier relationships in relation to forced labour (modern slavery) and other human rights abuses, fraud and corruption.
  • Continually developing your knowledge of forced labour (modern slavery), human rights, fraud and corruption issues, and applying this in your professional life.

Enhancing the proficiency and stature of the profession

The code of conduct in this section asks members to bring skills, competences and a good reputation to the procurement industry. In addition, CIPS members are expected to keep their CPD up to date and undertake a certain amount of training, reading or knowledge gathering each year. In doing so, procurement professionals can apply their knowledge within their employment and help to develop both themselves and colleagues.

This can be achieved by:

  • Continually developing and applying knowledge to increase your personal skills, and those of the organisation you work for.
  • Fostering the highest standards of professional competence amongst those for whom you are responsible.
  • Optimising the responsible use of resources which you have influence over for the benefit of your organisation.

Ensure full compliance with laws and regulations

The final part of the CIPS code of conduct is related to complying with legislation and regulations through:

  • Adhering to the laws of the countries in which the procurement professionals practice, and in countries where there is no relevant law in place they will apply the standards inherent in this code.
  • Fulfilling agreed contractual obligations.
  • Following CIPS guidance on professional practice.

Last but not least, the CIPS code of conduct outlines what is important to help a procurement professional practise in a professional, ethical, and effective way. This code is reviewed regularly to keep it relevant and is approved by CIPS Global Board of Trustees.

In conclusion

Procurement professionals who are perfectly familiar with the CIPS code of conduct and its correct standards, and follow such standards at all times can help their organisations to achieve long-term success, being more financially successful, and create and sustain a good reputation.

Ethics in procurement and supply operations are a moving goalpost that procurement professionals should ensure they keep up to date with. Legislations and standards can change frequently so it is significant to always follow the current version of the employer’s code of ethics in order to ensure that procurement best practices are used.  

I hope this has been of interest to you and furnished you with some knowledge to consider.

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