Choose your friends wisely

I’m increasingly feeling that 2012 will be seen as the year that the supply chain took new dominance in the world of corporate reputations. 

Back in the day, 'corporate social responsibility' was all about showing that your business could do the cuddly stuff – that you had a heart, that you supported good causes, that you cared. Things moved on in many different directions, with many forward-thinking companies realising that they had to show that the way in which they did business itself was good.

But these days that’s not enough. Our newspapers offer enough scandal triggered by businesses' supply chain partners to give a Halloween fright to any corporate responsibility manager. We’ve got news of further rioting at Foxconn’s factories, no doubt deepening the headache for Apple about knock-on effects on its reputation; we’ve got BP’s never-ending deep water horizon battle, with executives still insisting “it wasn’t our fault!”, pointing in the direction of Transocean and others; while Sainsbury’s has been put in the ‘hall of shame’ over its treatment of suppliers.

It’s not just supply chain slip-ups that are repositioning the debate about what influences the ethical reputation of our biggest brands. This week’s Ethical Performance reports several stories involving multinationals publicly supporting 'pro-social' legislation whilst associated trade groups lobby for its downfall behind the scenes. So it’s not just what you do, and it’s not just what your suppliers do or you do to them, it’s also what your partners and associates do that’s in the spotlight.

Of course, I’m not suggesting that damaging supply chain and partner scandals are new. Nike and Gap’s sweatshop scandals in the ‘90s are a case in point that big brands have long been subject to such scrutiny. But I do think we’re seeing a more systematic assessment of what’s going on behind the scenes of big corporates – driven partly by the work of NGOs such as War on Want, Greenpeace and Global Witness, partly by investigative journalists and curious academics, and partly by an increasingly active and by-no-means homogenous ‘consumer’, empowered by rich data and networks offered by the internet and social media.