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Fleet Ethics 101: What Should Be Covered?

As technology continues its march forward, there are more circumstances where business ethics come into play. It’s a good idea to negotiate an ethics agreement with suppliers, to outline both companies’ responsibilities.

June 2013, by Staff

It’s a complex business world we live in. Information is available in detail, formats, and sources unheard of only 10 or 15 years ago. Suppliers bring new products and services to market at a lightning pace, while government overwhelms us with new laws and regulations by the hour.

Doing business in such an environment makes it important for managers to know the company’s code of ethics, both internally and as it pertains to supplier relationships. Also, it’s important to know the code’s precepts are available to (and reviewed by) all suppliers.

Defining Ethics

Dictionary definitions of ethics vary to some extent, but are generally similar. According to Merriam-Webster’s dictionary, ethics are “the discipline dealing with what is good and bad and with moral duty and obligation.”

Business ethics can be defined as ethical rules and principles within a business or commercial context. Most businesspeople understand the overall requirements of ethical conduct when conducting business — much of it is common sense — and many of them must sign ethics agreements.

There are specific areas of business activity that lend themselves well to establishing a code of ethical conduct. These areas include information, reciprocity, conflicts of interest, equal opportunity, competition, communication, and gifts and entertainment.

Any ethics agreement should, at the very least, address each specific area of business activity, in light of both the company’s and supplier’s ethics codes. Thus, the first step in the negotiation and creation of an ethics agreement should be for both the company and the supplier to find common ground and discuss their respective codes of ethics.

✔ Keep Information Private

The information revolution has gone well beyond anything a fleet manager could have dreamed of only a few years ago. Documents are in electronic form, and can be accessed anywhere in the world. Written letters and memos have become e-mails, tweets, and blog entries, and the information contained in them is open to just about anyone. Such information, as it pertains to fleet relationships, can include rates and pricing, credit and financial information, business plans, and even personal information.

Here are examples of ethical violations on both sides of the fleet “desk”:
A supplier provides a customer with a price quote for the continuation of a recently expired contract, hoping to keep the customer from bidding the business out. In an attempt to do the best job for the company, the fleet manager is tempted to “shop” that bid to other suppliers, knowing they would be willing to undercut the price to take the business. There is nothing illegal about bidding out, unless the customer is bound by a confidentiality agreement of some sort, but it is highly unethical. The supplier provided the price quote in good faith, and has a reasonable expectation of confidentiality and privacy in dealing with the customer.

On the other side, consider a situation where the supplier is visiting the customer, and, during a moment when the customer is distracted or away from his or her desk, the supplier notices a memo containing pricing from another supplier sitting on the customer’s desk. Again, the supplier has not acted illegally by glancing at the memo, and perhaps the fleet manager should have kept such a memo more secure, but it is certainly unethical for the supplier to write down or retain the pricing that he or she knows should be confidential.

Thus, an ethics agreement should cover the handling of information, in any form, by both the fleet and the supplier. Both parties should agree to keep all correspondence (hard copy or electronic), communications, pricing, financial or credit information, and anything else related to the business relationship completely confidential.

Specific mention should be made of data. Today, suppliers capture and provide data to their customers at unprecedented levels. In the past, such data might be entered into and maintained on site by the customer; however, today an increasing amount of data exists on supplier servers and can be accessed via the Internet. The agreement should require the supplier to keep data confidential and agree to provide it to the customer on demand.

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