Large businesses across the globe have admitted they are awarding contracts to suppliers, without having critical information about how they do business.
Across the world, about one third of large companies said they issue tenders or contracts without having an anti-bribery and corruption policy for their main suppliers. One in five firms does not have any financial information about main suppliers beforehand, and 15% of companies do not have in place information about their main contractors’ health and safety credentials.
In addition, corporations did not always check the validity of the information provided by suppliers, or audit contractors on site to check they were adhering to their own policies.
A third said they do not conduct basic checks, such as internet research or making telephone calls, to validate suppliers’ information relating to health and safety, or financial reports. Half of businesses said they do not check suppliers’ anti-bribery and corruption policies.
Further, about one in five large businesses did not conduct any visits to supplier sites to check contractors were operating in accordance with statements made in their health and safety, anti-bribery and corruption and financial documents.
In total:
35% of businesses do not perform health and safety audits;
55% of businesses do not carry out checks on financial reports; and
61% of businesses do not perform anti-bribery and corruption audits.
The survey was commissioned by Achilles – a global supplier information management company with 22 offices around the world – and carried out by independent research company IFF.
In total IFF interviewed 300 supply chain professionals from businesses across the USA and Canada, UK, Brazil, Spain and The Nordics – comprising Denmark, Norway and Sweden. All respondents worked in four industries – Oil and Gas and Mining, Construction, Power and Utilities, and Manufacturing.
Adrian Chamberlain, Chief Executive of Achilles, said: “It is not an ‘optional extra’ for global businesses to operate in a safe way, tackle bribery and corruption and address financial risks; in many places, these are legal requirements. ”
“Large businesses have a responsibility to carry out proper due diligence on their suppliers to protect people working on sites, their own reputation and also the investments of shareholders – who trust them to manage risks.”
“We estimate that businesses are spending $60 billion on managing information about suppliers globally – yet this survey shows it isn’t working; there are still real gaps in knowledge. It is essential that corporations put in place systems to gather, manage and update supplier information.”
“Businesses often rely on the same suppliers. Managing their data is up to 10 times more efficient when whole industries work together to agree common standards of suppliers, and then share non-commercial supplier information via an online portal.”
Regional differences
Do you hold information about suppliers before issuing a tender or awarding a contract?
| Financial reports | Health and safety policy | Anti-bribery and corruption policy | |
| Europe | 16% failed to gather suppliers’ information | 14% failed to gather suppliers’ informaiton | 31% failed to gather suppliers’ information |
| USA | 40% failed to gather suppliers’ information | 17% failed to gather suppliers’ information | 33% failed to gather suppliers’ information |
| Latin America | 17% failed to gather suppliers’ information | 8% failed to gather suppliers’ information | 37% failed to gather suppliers’ informaiton |
Do you carry out desktop checks on suppliers’ information?
| Financial reports | Health and safety policy | Anti-bribery and corruption policy | |
| Europe | 29% failed to gather suppliers’ information | 40% failed to gather suppliers’ informaiton | 57% failed to gather suppliers’ information |
| USA | 57% failed to gather suppliers’ information | 37% failed to gather suppliers’ information | 57% failed to gather suppliers’ information |
| Latin America | 20% failed to gather suppliers’ information | 14% failed to gather suppliers’ information | 42% failed to gather suppliers’ informaiton |
Do you carry out on-site audits of suppliers information to make sure suppliers are acting in accordance with their own policies?
| Financial reports | Health and safety policy | Anti-bribery and corruption policy | |
| Europe | 57% failed to audit suppliers’ information | 37% failed to audit suppliers’ informaiton | 66% failed to audit suppliers’ information |
| USA | 57% failed to audit suppliers’ information | 58% failed to audit suppliers’ information | 63% failed to audit suppliers’ information |
| Latin America | 52% failed to audit suppliers’ information | 28% failed to audit suppliers’ information | 58% failed to audit suppliers’ informaiton |