I remember reading Hamlet by William Shakespeare when I was in high school back in Minnesota. Most of my classmates considered it torture, but I loved it. The intensity, the intrigue, and, of course, those immortal words of wisdom: “To thine own self be true, and it must follow, as the night the day, thou canst not then be false to any man.
This sentiment has stuck with me through the years, and it comes to mind particularly when I hear stories about various ethical transgressions in the supply chain. As much as we like to think that there is a distinct demarcation between right and wrong, ethical and unethical behavior, in today's supply chain, that line isn't always clear.
Consider something as seemingly benign as the interactions between customers and suppliers. For the past 20 years, supply chain management pundits have been touting the importance of “relationships” between trading partners — seeking the “win-win,” as opposed to beating suppliers down to pennies of profit or price gouging desperate customers. While I believe that this more cooperative approach has truly changed supply chain management for the better, I think it has also created an environment with a higher potential for ethical quandaries.
The challenge for professionals today is: Where do you draw the line? When does getting to know your partners cross into the realm of personal relationship, creating a conflict of interest? At what point does a business dinner or outing become too extravagant?
With the potentially devastating cost of a breach in ethics — either monetary or in terms of brand reputation — it is critical for companies to ensure their employees understand and adhere to a clearly defined Code of Conduct.
This year, Avnet was one of only five companies in the electronics industry recognized by the Ethisphere Institute as one of the 2014 World's Most Ethical Companies. This was a tremendous honor that I believe is the result of a very concerted effort throughout every level of our organization to create a culture where integrity is not only expected, but also very clearly expressed and reinforced.
For example, as a condition of employment, all Avnet new hires are required to sign an acknowledgment confirming their receipt of our Code of Conduct and the mandatory company policies it represents. In addition, every one of our 18,000 employees must complete a number of online training sessions that further describe what our Code of Conduct means and how it applies to our jobs.
Since our Code cannot possibly cover every situation we may encounter, if an employee is unsure if an activity is proper, our Code of Conduct recommends a quick self-check, which entails asking four simple questions:
- Does my action reflect Avnet's core values?
- Does my action harm our company, customers, suppliers, shareholders, or my fellow employees?
- Would I take this action if it were published on the front page of a major newspaper?
- How would I feel if this action were taken against me?
If they are still unsure, employees are provided with multiple ways to obtain advice and guidance concerning our Code of Conduct, including a number of designated Code of Conduct Advisors.
It is also important to insist on integrity from your trading partners, because poor decision by members of an extended supply chain can reflect badly on all members of that network. When establishing a relationship, make sure you consider whether that partner shares Avnet's commitment to integrity. For example, you can review the potential partner's code of conduct and ask for details on how it administers that code both internally and within its supply chain.
Given the intense competition in today's supply chain, it is easy to see how both bottom-line and top-line pressures can sometimes cause individuals to suspend their better judgment. And the reality is that, if someone is intent on breaking the law or flouting fair business principles, there may be little you can do to stop that person.
However, we can choose not to do business with a company that has a history of corruption or fails to demonstrate a commitment to integrity in business transactions. We can expose the individual who asks for a kickback or who bribes a customs official. We can stand up when the infraction is clear, and we can provide the resources for our employees and partners to help when the lines are less distinct.