Know your suppliers and their suppliers.
Many firms do not fully vet their
supplier’s capabilities and their ethical
reputation. While ISO 26000 social
responsibility standards provide
guidelines for establishing ethical
standards, a firm needs to conduct audits
to ensure these guidelines are being
followed by all partners along the
supply chain. For example, to secure
the government’s technology supply
chain, the U.S. Department of Defense
(DoD) conducts audits and requires
certification of all suppliers along the
supply chain—not just its direct vendors.
Because it is inefficient for Western
firms to conduct frequent audits
at various suppliers located in emerging
markets, Western firms should
form partnerships with various NGOs
with local presence who can conduct
those audits on a firm’s behalf or provide
information about the supplier’s
reputation to ensure ethical standards
are maintained.