Question

What role does legal and regulatory compliance play in procurement?

Answer 1

compliance plays a critical role in helping procurement understand whether it can even buy a product from a supplier and, if so, what the regulatory requirements might be.

It starts with compliance having a awfully solid understanding of the business itself and the way the operate of acquisition works among it, says Matt Broad, senior vp, general counsel, and company secretary at Darden Restaurants. solely then will compliance integrate totally into the acquisition method.

Specific to Darden, “One of the foremost vital square measureas of compliance we tend to are targeted on is food safety and food quality,” Broad says, noting that the overall quality team provides the technical experience from a food safety and quality perspective, and compliance provides support from a restrictive perspective. Together, compliance and acquisition work along to make sure the correct safety and quality standards square measure set, followed, and tested.

“We communicate, on associate current basis, the expectations to acquisition in order that they will execute the particular sourcing of merchandise during a manner that meets all of the standard and compliance expectations of the corporate,” Broad says.

The industry may get pleasure from compliance and acquisition formation nearer ties. At Intel, parenthetically, “we have a long and shut relationship with our acquisition department,” says Jo Levy, chief compliance officer at the $55 billion semiconductor producing company. “The head of our acquisition department is on our ethics and compliance oversight committee [ECOC] and has been for several years.”

In addition to the pinnacle of compliance, Intel’s ECOC includes senior representatives from across the corporate and is chartered by and reports to the audit committee of the board. the aim of the ECOC, co-chaired by the director of internal audit and also the chief compliance officer, is to make sure “we square measure connected across the corporate from a policy and method perspective … and philosophically, as well,” Levy says.

In several aspects, acquisition is that the execution and implementation arm for several of the compliance department’s policies and directives at Intel, she adds. Anti-corruption is simply one space wherever compliance and acquisition partner.

For example, compliance works with acquisition on anti-corruption due diligence screening of third parties, drafting contract terms and conditions, coaching of partners and third parties, still as on auditing and watching third parties, Levy says. acquisition can screen for problems love labor conditions and whether or not the third party is financially stable, parenthetically, whereas compliance can screen for problems like anti-corruption and records of banned conduct