Financial Responsibility Is Guiding Principle for Supply Professionals

FOR RELEASE: January 7, 2005

CONTACT: Jean McHale
  ISM Public Relations
  800/888-6276 ext. 3143
World's largest supply management organization encourages socially responsible business practices for internal policies and relationships with suppliers

TEMPE, Ariz., January 7, 2005 — As part of its mission to lead supply management, Institute for Supply Management™ (ISM) continues to encourage supply professionals to leverage their key organizational roles to lead socially responsible behaviors that benefit the workplace and, by extension, the individual, the organization and the community.

ISM's Principles of Social Responsibility document provides a framework of definitions and behaviors, tailored to supply management, in seven areas: Community, Diversity, Environment, Ethics, Financial Responsibility, Human Rights and Safety. The principle, Financial Responsibility, involves following applicable financial standards and requirements, applying sound financial practices and ensuring transparency in financial dealings as well as actively promoting and practicing responsible financial behavior throughout the supply chain.

In order to establish a baseline for current socially responsible behavior, ISM's Committee on Social Responsibility conducted the first-ever survey of supply professionals. The summary report, Social Responsibility and the Supply Management Profession: A Baseline Study, was released as a companion piece to ISM's Principles of Social Responsibility. A total of 1,163 organizations responded to an e-mail survey sent to 11,119 addresses, for a response rate of 12.5 percent. Out of 951 survey responses to statements related to the principle, Financial Responsibility, 88 percent (837 respondents) indicated that their organization is knowledgeable of, and follows generally accepted financial standards and requirements "to a good, great, or very great extent". A slightly smaller percentage, 78 percent (738 respondents), indicated that their organization actively promotes responsible financial behavior throughout the supply chain "to a good, great, or very great extent".

ISM encourages supply professionals in all companies, in all geographic locations, to review the Principles document and conduct their own analysis using the accompanying audit. Audit questions ask supply professionals to consider whether their organizations educate employees about appropriate financial responsibilities and whether there is a process in place that promotes and acknowledges employees who, through their actions, demonstrate a strong commitment to financial responsibility. Additionally, the audit asks what corrective action and compliance processes exist and whether organizations and their suppliers implement fiscal policies, financial management systems, and accounting controls that help ensure fiscal responsibility and long-term viability.

Electronic versions of ISM's Principles of Social Responsibility and Baseline Study publications are available on the ISM Social Responsibility Web site

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