CIPS Module 1 - Explain Key Aspects of
Corporate Governance of a Procurement or
Supply Chain Function - 3.1 Questions and
Comprehensive Answers Graded A+ 2024-2025
Define the terms
Corporate Governance
Stakeholders
Cod of ethics - ✔️✔️The mechanisms, procedures and processes that are used to control
and direct an organisation
An individual or group of individuals with an interest in an organisation, employees,
customers, community
A document detailing acceptable behaviour within an organisation
Describe what is meant by corporate governance? - ✔️✔️The system of standards,
procedures, and policies by which can organisation is controlled. It is a framework that
is created around the organisations values and objectives
Focuses on making organisations, effective, efficient and successful and their
procedures and policies ethical
Aims to govern and control the actions of stakeholders. The policies contain the roles
and expectations of people within their organisation
Ensure individuals don't take advantage of the organisation to gain an unfair advantage
State the elements of corporate governance? - ✔️✔️Policies and Procedures
Stakeholder Management and Board Accountability
Performance Management
Stakeholder Protection
Values and Ethics
Describe what is meant by conflicts of interests? - ✔️✔️This occurs when a persons
involvement within an organisation includes multiple interests
Interests could be financial or having a family member working within the business,
these may influence a persons behaviours in favour of their own gain (apposing
loyalties)
, State examples of conflicts of interest and the possible outcomes of this? - ✔️✔️A buyer
having a close relationship with a procurement manager - the buyer may be treated
more favourably than others and rules not followed, salary could be higher than others
due to personal relationships
A buyer having a relationship with a subordinate or supplier - confidential information
could be disclosed, unprofessional conversations could be held in the work place.
Subordinate could receive favourable treatment
A buyer awarding a contract to a family member - buyer may help the family member to
win the contract by sharing information to benefit them unfairly, family could financially
compensate
Creating a rival organisation to the one which a person is employed by - if a buyer sets
up a business that is identical to that of their employer, employing business could lose
business
Accepting payment from suppliers in exchange for information - a buyer could be
influenced to award a contract to an unsuitable supplier or unfairly award a contract to a
supplier who does not provide the best value
Accepting corporate hospitality or gifts in return for awarding a contract - a buyer could
be influenced, bribed or feel obliged to award a contract to a supplier who presents
them with things that the buyer finds appealing and that they may not usually be able to
afford
What 4 questions can be asked in order to identify potential conflicts of interest? -
✔️✔️Will I gain financially in addition to my salary?
Do I have any personal relationships with colleagues or suppliers?
Am I doing an identical role for a competitor?
Should I disclose any of my concerns?
State the two ways in which conflicts of interest may present themselves - ✔️✔️An actual
conflict of interest occur when a procurement professional has to make a decision that
may effect them personally
A perceived conflict of interest occurs when a procurement professional has private
interest that could effect a decision making process
Describe the '4D Model' in order to address conflicts of interest - ✔️✔️Disclose - the
potential conflict of interest to the organisation. Although it doesn't remedy the situation
it is important to maintain ethical behaviour.
Corporate Governance of a Procurement or
Supply Chain Function - 3.1 Questions and
Comprehensive Answers Graded A+ 2024-2025
Define the terms
Corporate Governance
Stakeholders
Cod of ethics - ✔️✔️The mechanisms, procedures and processes that are used to control
and direct an organisation
An individual or group of individuals with an interest in an organisation, employees,
customers, community
A document detailing acceptable behaviour within an organisation
Describe what is meant by corporate governance? - ✔️✔️The system of standards,
procedures, and policies by which can organisation is controlled. It is a framework that
is created around the organisations values and objectives
Focuses on making organisations, effective, efficient and successful and their
procedures and policies ethical
Aims to govern and control the actions of stakeholders. The policies contain the roles
and expectations of people within their organisation
Ensure individuals don't take advantage of the organisation to gain an unfair advantage
State the elements of corporate governance? - ✔️✔️Policies and Procedures
Stakeholder Management and Board Accountability
Performance Management
Stakeholder Protection
Values and Ethics
Describe what is meant by conflicts of interests? - ✔️✔️This occurs when a persons
involvement within an organisation includes multiple interests
Interests could be financial or having a family member working within the business,
these may influence a persons behaviours in favour of their own gain (apposing
loyalties)
, State examples of conflicts of interest and the possible outcomes of this? - ✔️✔️A buyer
having a close relationship with a procurement manager - the buyer may be treated
more favourably than others and rules not followed, salary could be higher than others
due to personal relationships
A buyer having a relationship with a subordinate or supplier - confidential information
could be disclosed, unprofessional conversations could be held in the work place.
Subordinate could receive favourable treatment
A buyer awarding a contract to a family member - buyer may help the family member to
win the contract by sharing information to benefit them unfairly, family could financially
compensate
Creating a rival organisation to the one which a person is employed by - if a buyer sets
up a business that is identical to that of their employer, employing business could lose
business
Accepting payment from suppliers in exchange for information - a buyer could be
influenced to award a contract to an unsuitable supplier or unfairly award a contract to a
supplier who does not provide the best value
Accepting corporate hospitality or gifts in return for awarding a contract - a buyer could
be influenced, bribed or feel obliged to award a contract to a supplier who presents
them with things that the buyer finds appealing and that they may not usually be able to
afford
What 4 questions can be asked in order to identify potential conflicts of interest? -
✔️✔️Will I gain financially in addition to my salary?
Do I have any personal relationships with colleagues or suppliers?
Am I doing an identical role for a competitor?
Should I disclose any of my concerns?
State the two ways in which conflicts of interest may present themselves - ✔️✔️An actual
conflict of interest occur when a procurement professional has to make a decision that
may effect them personally
A perceived conflict of interest occurs when a procurement professional has private
interest that could effect a decision making process
Describe the '4D Model' in order to address conflicts of interest - ✔️✔️Disclose - the
potential conflict of interest to the organisation. Although it doesn't remedy the situation
it is important to maintain ethical behaviour.
