Mon, 1 Mar 2021
22.7 C
Durban

Don’t let conflicted employees and dishonest suppliers destroy your business

Home Business Management Education & Training Don’t let conflicted employees and dishonest suppliers destroy your business

TWO things that could destroy your organisation’s reputation and credibility are conflict of interest and supplier misinformation. These have always been threats to business but now, in the midst of the COVID-19 crisis, the need for transparency is greater than ever as the business world anticipates an uncertain future.

That’s according to Rudi Kruger, General Manager at LexisNexis Data Solutions, who said that as the pandemic grips the globe and an economic downturn is expected, companies are having to rethink every aspect of their organisation.

“There is no longer room for half-hearted vetting. A lot is about to change, and it is wise to ensure that your organisation is in a better position to ride the wave of an economic slump. You need to trust your employees, partner and suppliers even more than before.”

Kruger said several frameworks exist to guide organisations against the risks including the King IV Report on Corporate Governance for the private sector and the Public Finance Management Act as well as the Municipal Finance Management Act, targeted at the public sector. However, regular reminders to be vigilant are always useful when protecting the business from hidden risks.

Risks present themselves in various ways but in the case of employees, here is what to look out for:

  • Employee involved in fraudulent transactions
  • Having direct ownership or business association with the supplier
  • Abuse or purposeful neglect in decision-making authority regarding purchases or supplier selection
  • Employee being a co-director of an active supplier
  • Employee co-owns property with a director of an active supplier
  • Property transferred to employee as compensation
  • Supplier sold a property to an active employee
  • Professional services rendered by employee for supplier in a private capacity.On the supplier side, misinformation could include:
    • Hiding the business interests of director, especially if they are linked to other suppliers/employees
    • Hidden pass-through schemes
    • Fraudulent banking details presented
    • Supplier no longer in business or filed for liquidation
    • Supplier director/s is an active employee
    • Supplier listed on restricted supplier database
    • Supplier director listed as an active government employee
    • Supplier appears on restricted list operating under another name

    He said one way to identify these risks internally is through employee declarations. Employee declarations of interest ensure that employees are transparent about their business interests outside of the organisation.

    While employee declarations will assist with information gathering, Kruger said the onus is still on the organisation to run vital checks. Likewise, suppliers must also go through extensive vetting to verify the information they’ve supplied before entering into a business relationship.

    “Vetting assists by uncovering the employee and supplier’s true natures, thereby confirming or dispelling the information they’ve supplied to you.”

    Key conflicts and misinformation can be identified by processing checks against external data providers and your organisation’s vendor database. “This will enable you to discover potential connections, ownership of property or unscrupulous behaviour between staff and suppliers,” said Kruger.

Most Popular

Eazi does it: opening access equipment doors in the mining industry

WORK-at-height and material-handling equipment supplier, Eazi Access has added a second Hi-Capacity JLG Model, the JLG 800 HC3 AJ, to its fleet. The company is...

CASE STUDY: Safe and efficient maintenance with a scalable and adaptable Lockout/Tagout implementation

Ontex, a leading international personal hygiene group, wanted to achieve a high level of safety and efficiency for machine maintenance interventions. Read how Brady...

Fuel prices head for record highs

SOARING international oil prices have set the stage for yet another hefty hike in fuel prices. That’s the warning from the Automobile Association (AA),...

R500m roads upgrade for Buffalo City

THE South African National Roads Agency (SANRAL) is to pump an estimated R500 million into a road infrastructure project in the Buffalo City Metropolitan...