Dealing responsibly with employees, customers and suppliers

2. The benefits of ethical trading

Listening to and working with your employees, customers and suppliers can be good for business. Here are some of the ways you may benefit from operating ethically:

• enhance your reputation as an organisation that is good to do business with
• build sales as customers increasingly choose to base their purchasing decisions on more than strict financial factors
• attract investment - ethically-motivated investors are growing in number
• maintain staff loyalty and motivation by treating people fairly and offering them chances for development
• increase trust in your business by fostering good relations and being transparent in your activities
• boost revenue by opening up your business to new ideas
• avoid bad publicity from unethical suppliers
• increase customer loyalty

Each of these can make your business more competitive and help you to become more successful. 

3. Getting started

An essential part of being a responsible business is honest and transparent trading. Here are some general principles to follow:

• treat everyone who comes into contact with your business with respect and dignity
• be open, honest and clear in all your communications, particularly regarding your products and services
• provide clear information and keep people appropriately informed throughout the selling process
• acknowledge problems and deal with them straight away
• ask for feedback to help improve the products and services you offer
• use Fairtrade products (those that carry the Fairtrade label) – this helps ensure that producers’ basic rights are respected and sustainable development is promoted

When dealing with your suppliers you should:

• cut out the middle man and where possible, develop long-term, direct relationships
• try to use local suppliers as much as possible – this helps to support your local community and also reduces carbon emissions from deliveries
• look at their employment, health and safety and environmental practices
• plan ahead – give suppliers clear and achievable timescales ensuring that their employees work reasonable hours
• always treat them fairly, sign up to the Prompt Payment Code and commit to paying them on time

Choosing your suppliers carefully can be an important part of your approach to being a responsible business. Above all stay in regular communication with them. Ethical trade is not a one-off activity.

4. Dealing ethically with suppliers

Suppliers play a major role in your business and nurturing good relationships is key to your success. Depending on the nature of your business, your supply chain may be quite complex and include not only those suppliers that you deal with every day, but also those that supply your suppliers and with whom you may not have a direct relationship.

There are few legal requirements for you to take responsibility for the behaviour of your suppliers, however, it can be very positive for your business to consider the ethical dimensions. Here are some ways you can adopt responsible supply chain practices and improve the way you deal with your suppliers:

• consider using local suppliers as much as possible – this helps to support your local community and reduces carbon emissions from deliveries
• cut out the middle man and seek to develop long-term, direct relationships, whenever possible
• plan ahead and give suppliers clear and achievable timescales
• make sure you are not purchasing from any organisation whose products are produced through the exploitation of child labour, paying an unfair wage in poor working conditions or any other violation of the worker’s rights or human rights
• build confidence by maintaining high standards on essentials such as paying suppliers on time and delivering goods on time Consider signing up to the Prompt Payment Code to demonstrate your commitment
• comply with your customers’ and suppliers’ auditing requirements and other formal requests
• use due diligence to assess who you are dealing with

5. Avoiding bribery and corruption

An essential element of being a responsible business is honest and transparent trading. The UK Bribery Act 2010 makes it a criminal offence for UK residents, nationals and UK companies (or overseas companies operating in the UK) anywhere in the world to give or receive a bribe. Companies are liable to prosecution if they fail to prevent bribery on their behalf by employees and other associated persons.

There are a number of steps you can take to minimise risks and show that your business has taken adequate steps:

• assess whether your business is at risk and, if so, the level of that risk
• put an anti-bribery and corruption policy in place
• use due diligence to assess who you are dealing with and who you appoint to represent you
• communicate, raise awareness and train employees and business partners – and ensure that you keep accurate financial records so you can demonstrate that all transactions are completed fairly and legally
• monitor and review your procedures
• inform the local authorities if you suspect a business of corruption

Your anti-bribery policy should include:

• a clear prohibition of the offer, gift or acceptance of bribes
• details of the procedures that should be followed during business transactions
• guidance on the provision of gifts, hospitality or expenses that may influence the outcome of business transactions
• guidance on political and charitable donations, including a prohibition of the payment of donations to political parties or charities that are directly linked to obtaining new business or gaining a business advantage
• requirement that any donations made in good faith are publicly disclosed.

Note that the following are not considered acts of bribery:

• providing genuine business hospitality
• carrying out proportionate and reasonable promotional activities