It is especially important in countries where corruption is endemic, and where partners and business practices are unfamiliar to us, that we identify ethical "red flags" before entering into commitments. Procurement is one of the first areas of businesses to enter new countries. In-depth knowledge of suppliers is therefore vital to success and to the company's reputation.
Integrity due diligence
Our standards for IDD facilitate access to knowledge about potential suppliers, how their business is conducted and what their values are. They also increase our understanding of the business environment we operate in, so that we know what to expect.
With the possible reputational impact and liability that can result from the actions of business partners becoming an urgent concern, IDD is, in our opinion, one of the most effective tools available Early risk identification is the key to success in managing integrity risk. In fact, the "red flags" are often not red but amber - a warning that something needs to be looked at in more depth or that some action needs to be taken before proceeding.
We have a separate and independent staff function that is responsible for carrying out IDD. When a risk is deemed significant, cases are referred to the business integrity function for further analysis.
Only a small number of business partners represent an integrity risk, and a simple set of tests can identify whether or not a risk is present. The evaluation of high-risk cases needs to be thorough, however, and this requires resources. Given the inherent risks in our operations, however, integrity due diligence can be one of the best investments we can make. A good reputation takes years to build, but it can be lost in a moment.