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| Crime Watch Purchasing: Biggest compliance traps loom in purchasing |
| Düsseldorf, November 7, 2011 – According to German companies, especially purchasing and procurement departments are concerned with and affected by compliance and liability risks – ahead of sales and financial departments. Although companies absolutely want to prevent or limit damages (92 percent) and improve their corporate image (63 percent), still over two-thirds of the companies are doing without either a compliance management system or supplier codes. That's the result of a recent survey by the Institut für Demoskopie (Institute for Public Opinion Polls and Research) in Allensbach on behalf of Kerkhoff Consulting and the law firm Kerkhoff Legal which specializes in compliance cases. This study is the basis for the new book by Gerd Kerkhoff: "Aktenzeichen Einkauf" (Crime watch purchasing) – with a foreword by Jörg Ziercke, President of the Bundeskriminalamt (Federal German Office of Criminal Investigation). |
"No other areas in companies have as much to do with corruption, non-conforming social standards and attempts of fraud – especially in the international field", says Gerd Kerkhoff, CEO of Kerkhoff Consulting. "So it's all the more surprising that only a minority of German companies have established a code which also commits their suppliers to abide by the rules." According to the Allensbach survey, only 31 percent of the companies with sales of under EUR 250 million have established such a code. Yet, even in those companies which did introduce a supplier code it's not used to its fullest potential. For instance, not even one third of the companies have their code integrated into their own general terms of business (AGBs). Sixty-seven percent of the companies have their code countersigned by their suppliers. Still: According to their own information, 86 percent of the companies with a supplier code check whether the rules of the code are also complied with. But only one third of them also uses external assistance to obtain a neutral evaluation. "Particularly progressive are those companies which even take into account, in their codes, the different circumstances in their various supplier countries", says Sabrina Keese. Keese is a partner at Kerkhoff Legal and co-author of "Aktenzeichen Einkauf". However: Only one fifth of the companies takes country specifics into account. "These companies are true trailblazers", says Keese. "They will thus prevent being made liable for their suppliers' problems – for example due to child labor or pollution. Moreover, they are also able to present these security measures to their customers to strengthen their own brand as a fair enterprise." While a supplier code can protect and secure a company against external risks, a compliance management system also helps avoid company-internal legal errors. "Sometimes, managers and buyers don't know which legal regulations they are just breaching", says Gerd Kerkhoff. "When a buyer gets together with colleagues from other companies at the bar to swap experience, such talks can quickly and unexpectedly turn into violations of antitrust laws. And if that results in legal actions and a guilty verdict, a company may end up fast on the brink of bankruptcy." Although companies are aware of it, more than half of them are of the opinion that the introduction of a compliance management system would result in excessive expenditures. Sabrina Keese: "Frequently, companies feel that the introduction of a compliance management system is too expensive. But they forget to take into account the costs they'll be faced with if they are prosecuted at some later time. And even the individual manager who can be held personally liable today for offenses and violations should always keep in mind that he possibly might act illegally even without being aware of it." The new book "Aktenzeichen Einkauf – Mit Compliance Haftungsrisiken für Unternehmen und Management minimieren" (Crime Watch Purchasing – Using Compliance to Minimize Liability Risks for Companies and Management) uses concrete examples to illustrate not only looming dangers but also to show how managers and companies can ward them off by setting up a compliance management system and supplier codes. The book will be available at bookstores starting November 9, 2011. Authors: Gerd Kerkhoff, Gregor van Ackeren, Frank Blasius, Matthias Hoff, Sabrina Keese, Nicole Teresiak. ISBN: 978-3527506484, Wiley Verlag GmbH & Co. KGaA.
Kerkhoff Consulting GmbH |
