I hope that you have enjoyed the article “5 Components of Ethical Procurement.”

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What I am hoping is not done with this article is for a procurement director out there to say “Oh, we have three of those in place. We’re good.”

It is important to have all of those components in place if you really want anything close to a bulletproof culture of ethics. However, I will admit that one of these components is probably more important than all of the others.

What is that one super-important component of ethical procurement?

The ethics policy.

Without the ethics policy, the utility of all of the other components is lessened. That’s because the ethics policy defines the rules. Without well-defined rules, ethics training will be vague, an ombudsman won’t have any clear answers, a process with checks and balances won’t know what to check for, and audits will only reveal something that “might” be unethical.

The ethics policy provides the standard against which actual behavior is measured. Imagine if this situation happened in your organization…

A manager of an internal customer department wants to purchase consulting services to help his department. This manager has access to the pricing of all consultants used by the organization in the past. The manager suggests getting a quote from his wife’s consulting firm, saying that his wife’s firm can do the work a lot cheaper. Of course, this departmental manager will have to be the one OK’ing the decision because it’s his department that is affected.

There is no ethics policy outlining whether or not doing business with a spouse is acceptable.

The manager has never been told – via training or otherwise – that he cannot buy from his spouse.

There is no ombudsman to turn to for advice.

You are able to place orders or contracts independently, without the requirement of management or supervisory approval.

There have never been audits, so no one in the organization knows if this type of situation has happened before and, if it has, if it was problematic or not.

What would you do?

Would you worry about awarding the contract and, later, being suspected of being “in on the scheme” where others thought that you may have gotten paid off for keeping quiet about it?

Would you confront the manager and risk having a politically powerful employee as an enemy?

It is a tough situation without an ethics policy to support you, isn’t it?

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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