Leo Martin: Lessons from eight years of GoodCorporation

Date: 28 Feb 2009
Author: Mallen Baker

4. Problems down the chain

Video: Leo Martin talks about how the supply chain challenge is more to do with fairness than risk

Asked about supply chain issues, Leo is quick to state that most of the companies GoodCorporation deals with do not see it as an important area. Although some have got advanced programmes on pushing environmental management through the supply chain, many just don't see it as the priority. And besides, the real problems lie closer to home.

"Where we see it going wrong is all in terms of the organisation's own contractual relationships with the supplier. Our assessment starts off with fair assessment of suppliers, avoiding conflicts of interest, not employing the chief executive's best mate and all the rest of it.

"The next bit of it when you look at dull stuff like clarity of contracts and protection of intellectual property. We get quite a lot of problems where companies are really lax in terms of their attitude and sometimes aggressive in terms of not giving suppliers protection, not respecting their intellectual property, not respecting their data, being really glib about it because 'they're just a supplier'. We think that's really poor practice that can give companies quite a bad reputation."

It can come back to bite. "We go and interview the suppliers and you should hear the things they say about these things. It's not nice".

The biggest bug–bear is, of course, supplier pay. Leo says that GoodCorporation has often been instrumental in kicking companies to actually make them pay suppliers within their agreed terms – and those agreed terms can stretch logic at times. "We're currently working with a very large group whose payment terms are 90 days, which is 120 days effectively, even though we actually agreed to 60 days in our contract at the end."

He sums up the moral position grimly – "That's theft, isn't it? You're saying to someone that I'm going to pay you to do something, you've done it and, oh, well, wait a few months and I might pay you. You've taken something and you've not paid for it. If that was a child down the sweet shop they would soon be pulled up. Wouldn't they?"

These areas are, says Leo, the things they begin by focusing on well before they get into questions about whether the company is screening suppliers for environmental practices or human rights violations. Because unlike the latter, the causes of the problems begin close to home and can be addressed.

<< Previous page 1 | 2 | 3 | 4 | 5 Next page >>

Further reading

GoodCorporation website

Bookmark with:

 Del.icio.us |  Digg |  reddit |  Facebook |  StumbleUpon

Comments

You must be logged in to add comments