Procurement Ethics: Use DRD & Stay Clean
PurchTips - Edition # 201
By Charles Dominick, SPSM
How Can You Avoid A Procurement Ethics Scandal?
Plain and simple: it is unethical for a procurement professional to award an order to a supplier with whom he or she has a personal or financial relationship. However, finding an organization where none of its employees have a friend, spouse, etc. among its supply base's thousands of employees can be challenging.
So, what should you do if you have a relationship with a current or potential supplier's employee?
I recommend a process called DRD, which I pronounce like "dirty" for ease of remembering. DRD stands for Disclose, Recuse, Document - three steps to take so that decisions are made without unethical influence.
Disclose means to advise management of a relationship that may appear to be a conflict of interest.
Recuse means to remove yourself from participation in a decision in order to avoid a conflict of interest. When you disclose the relationship to management, advise them that you want no involvement in the decision due to the potential for real or perceived personal gain.
Document means to produce and retain written correspondence about your disclosure. Ethical accusations often arise months or years after a decision is made. By then, it can be difficult to remember the steps taken to maintain the integrity of the decision-making process. Forgotten details only strengthen the appearance of impropriety. Good documentation can prove that a decision was reached ethically.
A procurement department should then ensure that those with a personal supplier relationship are prevented from accessing sensitive information such as the pricing of competing suppliers. Some organizations even go as far as maintaining a conflict of interest database and requiring employees to disclose certain relationships upon being hired, when permitted by law.
Though you can't guarantee that every procurement team member will be free of relationships with supplier employees, good procedures can reduce the risk for accusations of unethical procurement decisions.
(keep reading for a FREE Offer)
Spotlight On Professional Development Opportunities
Are you tired of not getting enough opportunities, respect, and money out of your purchasing career? Well, guess what? Nothing will change unless you take action towards becoming a world-class purchasing professional.
You see, today's employers refuse to reward employees for yesterday's skills. They demand that purchasing professionals like you use the most modern skills and achieve unprecedented results. They want you to save more money, achieve better operational performance, and reduce risk.
Earning your SPSM® Certification by completing the Senior Professional in Supply Management® Program is the action to take if you want to bring the most modern purchasing practices into your organization and achieve your career potential. Learn how to earn your SPSM® Certification (and perhaps get an iPod) at:
The Latest Purchasing News
- Purchasing Managers/Directors: Are you struggling to develop a plan for improving your team's performance? If so, visit: www.NextLevelPurchasing.com/benchmark
- Discuss today's topic on our LinkedIn SPSM Group! Members can go straight to the group at www.tinyurl.com/7lmbzy and non-members can learn how to join at www.tinyurl.com/8tgfnd
- Considering a career move? Browse jobs preferring candidates with the SPSM® Certification at: www.NextLevelPurchasing.com/jobs
Not sure if your procurement department is structured appropriately? Our new whitepaper entitled "Separating A Procurement Department Into Tactical & Strategic Teams: Is It Right For Your Organization?" will help you make that determination.
"Separating A Procurement Department Into Tactical & Strategic Teams," Visit:
Copyright 2010. This article is the property of Next Level Purchasing and may not be copied or republished in any form without the express written consent of Next Level Purchasing. Click here to request republishing permission.