Business has changed. Today detailed oversight of supply chains to ensure consistent standards of governance and ethics is no longer a ‘nice-to-have’ but has become an integral ESG requirement for all companies. However, despite the best of intentions, many companies’ views of their supply chains can be incomplete and fragmented, leaving blind spots that unwittingly expose them to violations of their own policies on governance and sustainability. In order to identify, analyse and mitigate these risks a third-party review is essential, which is why Africa Integrity and Kleos Advisory have joined forces to create Supply Chain Integrity Monitoring Services (SCIMS).
As recent events have demonstrated, companies of all sizes are considered responsible for the entirety of their supply chains and, as scrutiny from politicians, activists and opinion formers on social media continues to grow, it is increasingly important for businesses to put in place effective monitoring of their supply chains. This means that companies would be well-advised to treat the components in their supply chains as “associated persons” (as defined by the UK Bribery Act 2010) and commit to efforts to prevent governance failures in every link of the chain. This is at the centre of the SCIMS model, which is based on the six principles of the UK Ministry of Justice “adequate procedures” guidance to help companies prevent wrongdoing by associated persons.
SCIMS will enable companies to scrutinise their supply chains systematically, discovering and addressing problems before they become crises, while also enabling companies to demonstrate the practical steps they have previously taken to monitor the integrity of links along their supply chain, should problems arise later.
Such monitoring is especially important for operations in regions such as Africa, where there is a heightened risk of suppliers exposing companies to reputational and potential legal damage. Although companies’ exposure to this varies, any entity with a supply chain that enters a region such as Africa needs to be acutely aware of this risk and put adequate procedures in place to mitigate it. With SCIMS, Africa Integrity and Kleos Advisory has brought together decades of experience and expertise in Africa and produced a four step service which seeks to do this.
This article originally featured in Africa Integrity’s October 2020 Newsletter. To join our newsletter mailing list, please contact us.