April is Stress Awareness Month. Let SHRM make your work life easier: Join Now
Shawn Premer shows how doing the right thing for employees leads to positive business results.
Is your employee handbook keeping up with the changing world of work? With SHRM's Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Build competencies, establish credibility and advance your career—while earning PDCs—at SHRM Seminars in 12 cities across the U.S. this spring.
#SHRM18 will expand your perspective – on your organization, on your career, and on the way you approach HR. Join us in Chicago June 17-20, 2018
Members may download one copy of our sample forms and templates for your personal use within your organization. Please note that all such forms and policies should be reviewed by your legal counsel for compliance with applicable law, and should be modified to suit your organization’s culture, industry, and practices. Neither members nor non-members may reproduce such samples in any other way (e.g., to republish in a book or use for a commercial purpose) without SHRM’s permission. To request permission for specific items, click on the “reuse permissions” button on the page where you find the item.
Employers are growing more dependent on relationships with third parties to provide HR services such as benefit program administration, recruitment and staffing management, and as partners in joint ventures.
But while suppliers of HR services, temporary employees, contractors and business partners can help reduce costs, improve efficiencies and remove business barriers, companies are increasingly recognizing that such arrangements can expose them to legal and reputation risk, according to a new report by The Conference Board,
Finding the Right Balance: The Essentials of Third Party Ethics Programs.
"Companies struggle with competing tensions that arise from developing business relationships with partners that aren't always mindful or responsive to a broad range of their own stakeholders' concerns, such as environmental compliance, health and safety, and human rights," comments report co-author Rebecca Walker, an attorney specializing in corporate compliance and business ethics.
To enable companies to benchmark their policies and procedures against those of other organizations, The Conference Board and the
Ethics and Compliance Officer Association (ECOA) surveyed 169 companies about their practices to ensure ethical behavior by third parties. Among the key findings:
Performing Due DiligenceBackground or due diligence checks are preferred to insisting that the third party adopt the company's ethics and compliance programs, the survey found. When it comes to due diligence:
As regards the focus of due diligence searches, disabling financial or legal conditions are more likely than reputational impairments to be the objective of scrutiny.
The most common ethics/compliance initiatives that companies extend to their business partners include:
Infrequent Compliance Audits
Company audits of third-party compliance with ethics policies and practices are infrequent, and a majority of the companies that audit don't do so routinely, the survey found.
Slightly more than 35 percent of the survey participants perform audits or otherwise verify that third parties conduct themselves as required by the company's own compliance and ethics policies. Of this group, slightly less than half conduct audits on a routine basis, while the remainder focuses their audits on specific concerns.
Room for Improvement
"The survey suggests that companies are satisfied with current methods of seeking to extend ethics and compliance standards or requirements to third parties but are willing to search for new approaches," says Berenbeim. "Companies rated all ethics and compliance efforts within a narrow and not especially positive range—they deemed them
Stephen Miller is manager of SHRM Online’s
Compensation & Benefits Focus Area.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Please sign in as a SHRM member before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 3,200 companies