Scenario 4: Risk and Supply Chain

Scenario 4

You have recently been promoted to global head of risk for a highly successful company in the technology and entertainment sector. The manufacture of a number of branded commercial products, including toys, is undertaken by several key suppliers in China, managed by a local agent. A new line is about to be released to support a global PR campaign for a new TV show. Given the recent media attention to supply chain issues you request audit reports on their compliance to your corporate responsibility principles, for which your company is widely recognised. The system in head office shows that audit reports have been received for the last three years, with a checklist held on file. You request copies of the full site visits, undertaken by a consultancy, and then find that none are on the system. Requests are made to the local agent who also is unable to locate them. You conduct desk based online due diligence on a couple of the suppliers and find that one was implicated recently in a scandal related to serious breaches of labour regulation. You now have a real concern that something may be wrong and wonder what to do next.

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