Buyers revisit ethics policies

By Damon Francis -- Purchasing, 4/5/2001

About one in five purchasing departments are revisiting ethics policies because of e-commerce. Even though reported improprieties are extremely uncommon, buyers want to make sure that all potential conflicts are covered.

Do suppliers, customers, or partners offer stock options or stock to buyers to foster business relationships? According to our survey results, it is very rare. Offers of stock do exist, but primarily from IPOs and start-up dot.coms. Perhaps the reason the practice is so rare is that it is regarded as an undeniable conflict of interests.

Only the largest companies tend to have written, institutionalized ethics policies. The vast majority of purchasing professionals deal with instances of possible problems in a case-by-case manner. Welcome booklets containing a written description of an ethics policy are a rarity and almost nonexistent. Vague descriptions of memos and "inferred" standards seem to be the norm in the function and many organizations still do not even put specific limitations on gifts for the people in charge of purchasing. Most commonly, companies put a cap of $25-$30 dollars on gifts for buyers. Lunches and dinners are common practice while tickets to sporting events seem to be among the most extravagant but still acceptable of gift-giving practices.