Fair treatment of suppliers helps to build trust and reputation

The fire at the Rana Plaza factory in Bangladesh a year ago, in which 1,100 workers died, damaged the reputation of retailers such as Primark and Bon Marche among others. The incident demonstrated the need for businesses to rigorously monitor their suppliers' management practices to ensure that employees are treated fairly and in this case to have the appropriate health and safety measures in place safeguarding the well being of workers.

Primark has now paid c12m dollars towards the compensation fund to support the Rana Plaza workers and their families. Paul Lister, the Company Secretary of Primark's owner, recently stated "we are determined to meet this responsibility to workers in our supply chain".

This example, yet again, helps to demonstrate the business case for ethical business practices. If key stakeholders such as suppliers are not treated well the outcome can be very damaging, not least to the hard-to-quantify cost of damaged reputation but also the potentially hefty cost of stakeholder redress.To reiterate the point of this blog, fair treatment of stakeholders and transparency helps to build trust and boost value.