Who is to blame for Procurement’s poor representation at executive level?

Almost twenty five years on, CEOs, Government officials and policy makers are still skeptical about procurement’s formal representation on the executive and senior policy development committees

In the first of four articles, Dr Douglas Boateng, SmartProcurement Editorial Board Member and CIPS Fellow, asks who is to blame for this?

In 2011, Transparency International UK published a report called Corruption in the UK. The research examined 23 sectors and institutions in the UK and the responses were as follows:

1. 71 per cent of UK citizens think corruption is a major problem in the UK;
2. 64 per cent of people think corruption is part of the UK’s business culture;
3. 53.4 per cent of respondents believe that corruption has increased either a little or a lot in the UK in the last three years; and
4. 48.1 per cent of respondents do not think the government is effective in tackling corruption.

In February 2011, the Anti-corruption Resource Centre reported that in Ghana sectors most affected by corruption include, amongst others, public financial management with particular regard to public sector procurement.

On 23 March 2011, Craig Fagan of Transparency International reported that although China had signed the UN Convention against Corruption, various critics had alleged that some of their institutions were not complying with good procurement standards. They cited the case of a telecom transaction in the Philippines to affirm their assertion.

On 3 April 2012 South Africa’s Public protector warned at an international conference in Cape Town that if corruption was not decisively dealt with it had the potential of “distorting the economy and derailing democracy”.

On 12 September 2012, the SABC reported that both the Chief Financial Officer (CFO) and the Chief Procurement Officer (CPO) had been suspended. It was interesting to note the way and manner in which the announcement was crafted. Similar stories continue to be reported all over the world in both developed and developing countries.

One therefore wonders:

1. What the responses will be if, in October 2012, people in countries like China, USA, South Africa, Nigeria, Philippines, France, Korea, Ghana, New Zealand, India, Canada, Brazil and Kenya, are asked to respond to the same survey questions used in the UK corruption study.
2. Whether CPOs, the practicing procurers, the CFO or even other very high level influences are to blame for these often procurement-related debacles tarnishing the profession and afflicting business and society as a whole.
3. If collectively, the entire professional procurement fraternity is to blame for our ongoing derision.

During the last twenty-five years, one had the opportunity to interact with over 1 000 local regional and global CEOs, senior executives, government ministers, Director-Generals and policy makers. Based on responses to date from these decision makers, I believe, as a high level professional member of global practicing collective, that we carry the blame for the continued misrepresentation and under representation of the professional procurer on CEO, Executive and senior policy making committees.

The prime reasons are that we continue to relatively fail to convince industry captains, Ministers and global policy makers that:

1. Procurement is a strategic, value-adding profession in its own right and deserves a seat on the Executive Committee and in the board room.
2. Like the Chief Financial Officer, Chief Legal Officer, Chief Information Officer and Chief Strategy Officer, the professional procurer also deserves to be directly reporting to the Chief Executive Officer.
3. Poor governance, contract awarding fiascos and other corruptive practices, associated with procurement in many instances, are not directly committed by the procurer.
4. There is a conceptual difference between Procurement, Logistics, Operations and Supply Chain management.
5. Procurement mainly reporting to Finance is technically a conflict of interest, hence the challenges continuously faced by governments, businesses and society.
6. Grand titles like Chief Procurement Officer or Chief Supply Chain Officer are relatively still not accompanied by the right job description and associated strategic responsibility.
7. Procurement is about development and strategic effectiveness and must be treated as a separate key executive, value-adding function in business and government.
8. For governments, procurement must be more than a number crunching exercise and must ideally not report to the Treasury to harness its economic developmental potential.
9. Like other professions (Accountants, Lawyers, Information Officers, Doctors and Pharmacists) all procurement practitioners and overseers must have a license to practice and strictly abide by a professional code of conduct.
10. The current representatives and overseers of professional procurers on various CEO executive committees must:
    1. Continuously go through an accredited procurement related professional development programme to acquaint themselves with, amongst others, the governance rules pertaining to procurement.
    2. Also be members of a recognised procurement professional body to represent the function at the Executive committee level.

A Fellow professional colleague once told me a proverb: “throw enough mud at the wall, some of it will stick”.

In simple terms it means that if enough (perhaps false or reckless) accusations are made against a person (or organisation), his or her reputation will suffer, whether or not this is deserved.

Despite some positive image improvements over the last ten years there are equally increasingly damaging occurrences, the consequence of which, if not collectively tackled, will have significant implications for current and upcoming procurement professionals, particularly the increasing negative image associated with the procurement profession.

In Part 2, Dr. Boateng will present some startling facts about the Procurement profession within the publicly quoted companies and state owned or government controlled organizations.