Supplier Code of Conduct
A Supplier Code of Conduct is essential in today’s world. In the court of public opinion, companies risk the loss of public trust and potentially irreversible damage to their reputations. Any acts or behaviours of a company’s supplier is seen by its customers as a breach of trust or fairness. In that case, the company can face a backlash from its customers.
For over 20 years, I have been working with client companies. I have helped them to design appropriate codes of conduct policy for the supply chain partners. But the important thing for any company is not just to have a code of conduct in place. Still, all companies must be active in checking that their suppliers are adhering to these policies. That’s why many companies use Goodada Supplier Audit Services to check up and ensure that their suppliers are sticking to the code of conduct.
So, if you have any questions or require any assistance, please do not hesitate to contact me.
What is a supplier code of conduct?
A Supplier Code of Conduct is a declaration by a firm of what it requires and how it expects the suppliers in its supply chain to act and behave. The areas include the environment, employees, child labour, slavery and accountability. A code of conduct may extend to others areas of the supply chain, such as customers of a firm’s products or brokers who trade a firm’s goods.
Are supplier codes of conduct binding?
A supplier code of conduct is a transparent form of communication between a company and its supplier about a company’s core values. Its objective is to help create a mutual understanding and expectations of a supplier’s responsibility regarding staff welfare, environmental impact and social responsibility.
Generally, it is considered best practice to have a broad policy. While it may not be a binding document, having a supplier signs the code indicates that the supplier acknowledges and accepts the code of conduct as a term of trade.
A good code of conduct may include a term that permits a third-party agency appointed by the company to visit the supplier to conduct social audits. Other companies will refer to the code of conduct in their purchase contract with a supplier. Including this into the purchase contract enables the code to become more binding.
Should a firm require that its suppliers follow a specific code of conduct?
But a supplier code is not just a statement from a company to its suppliers and those involved in its supply chain. It is also a statement to its consumers, customers, and investors concerning the practices that the company and its supply chain partners must follow.
With a code of conduct policy in place, a company declares that it will only select and use suppliers who share their values. Even a well-worded code of conduct will ring hollow if a company’s partners engage in harmful practices. So, a good supplier code of conduct policy should include a term that enables third-party inspectors to visit and audit their firm. The audit is to check if the supplier complies with the code of conduct.
Incidentally, it is best to send in third-party inspectors to review a company every two years.
What is the meaning of a Supplier Code of Conduct?
A supplier code of conduct is a policy that informs a company’s supply chain partners of its expectations and requirements that they adhere to high standards in safe working conditions, respect for the environment and ethical practices. A supplier code of conduct includes components such as:
- Worker practice and standards. This includes compliance with child labour, worker safety, working time, and discrimination policies.
- Environmental policy. This considers the impact on the environment of a production facility, its by-products or the products that a supplier produces.
- Ethical Policies. Here, it involves how a supplier adheres to anti-corruption measures while undertaking fair business practices and relationships
- Review and documentation policy: Outlines how the components are monitored and reviewed.
So, how will a code of conduct help?
The purpose of a supplier code is to provide expectations, give guidance, and promote ethical practices.
The advantages and benefits of a Supplier Code of Conduct:
- With a formalised supplier code of conduct, a company sets out clear expectations for suppliers in a way they can consult and engage with various parties across the supply chain.
- A supplier code of conduct policy helps reduce the risk of damage to a company’s reputation or brand in an incident at one of its suppliers.
- If a company is buying materials or products from countries with questionable child labour, worker welfare or environmental labour laws. A supplier code of conduct is crucial to set out the minimum standard that a company demands from its suppliers.
What is the difference between a code of ethics and a code of conduct?
A code of ethics is a policy that focuses on how a company and its supply chain partners shall conduct its business dealings and transactions under the highest ethical standards.
A code of conduct is a policy that describes how a company and its supply chain partners shall behave in terms of worker welfare and impact on the environment.
Do I need a Buyer Code of Conduct?
A buyer code of conduct is a document often issued by firms who operate in specific industries. These include arms, recycling industries, or industries that involve the sale of by-products or waste disposal. This provides a set of minimum requirements and expectations required from customers who source and use its products.
A Buyer Code of Conduct policy should also include a customer’s obligation to allow the suppliers appointed independent third-party inspectors to visit them. The purpose of the visit is to review their processes and distribution channels.
So, for those needing help with their Code of Conduct
Goodada offers a range of services. So if you require any assistance in auditing suppliers or any supply chain partner. To ensure that they are adhering to your company’s code of conduct please contact me. If your company requires a code of conduct policy for suppliers or buyers to be written. I can also provide this service to you, so please contact me below:
Therefore, for more information contact:
Contact Person: Aidan Conaty
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Phone:(Europe/ Rest of the World) +353 1 885 3919 ; (UK) +44.020.3287.2990 ; (North America) +1.518.290.6604