Corporate social responsibility or abiding by regulatory and ethical standards, is quickly becoming essential for many companies. By failing to abide by set guidelines or by making ethically questionable decisions, a company faces scrutiny from the public and press, the potential loss of business, and possible citations or violations from regulatory agencies. This means vetting contractors is essential to procurement. Eliminating noncompliant companies early on in the hiring process can help businesses avoid negative financial and reputational consequences.
While it may be easy for a company to ensure it is doing its part to abide by guidelines and keep up with its responsibility to its employees and the environment, it can be harder to keep track of the steps suppliers and manufacturers take to ensure they follow regulations and ethical standards. However, it is just as important for a company to be on top of a contractor's corporate social responsibility commitments as it is for the business to be aware of its own efforts. According to Business Finance, by publicly committing to regulations about ethics, sustainability, and local operations, a company may be able to improve its image and drive sales to those consumers concerned about purchasing from businesses that don't have a commitment to corporate social responsibility.
Managing compliance is essential for companies to use suppliers and manufacturers who will be compliant with company standards and local regulations. To ensure contractors are compliant with a company's expectations, a business needs to develop processes to determine if suppliers abide by set guidelines. Corporations need to be aware of exactly which contractors they're considering working with, what steps the contractor takes to ensure compliance, and if the company has had violations in the past. Firms must also continue to provide contractors and suppliers with updates on the latest developments and guidelines in terms of regulatory requirements, safety standards, and sustainability guidelines.
Prior to partnering with a contractor, a company must engage in a contractor screening process to determine whether or not that business follows regulations and ethical guidelines. Even if a company complies with regulatory laws set in the country they operate in, they may not observe all voluntary human rights or environmental standards, so it is essential to thoroughly vet the corporation before agreeing to a business arrangement. By working with Avetta, a hiring company can be sure its Procurement and Supply Chain Management process will be free from noncompliant contractors.