Archive: February, 2012

Governance and procurement

There’s been a lot in the press recently about the natural resources sector, from the £57bn megamerger of commodity trader Glencore and the mining company Xstrata to the family feud over a trust fund controlled by Gina Rinehart’s, heiress of Hancock Prospecting. There are a couple of other stories that haven’t received as much attention but highlight the importance of governance in procurement. The first is about Bumi, the British based natural resources group listed on the London Stock Exchange that has the largest coal-producing assets in Indonesia. Like CHC’s current client, ENRC, Bumi is the marriage of British finance and faraway resources. Bumi’s share price is down by two-fifths from a year ago. Nat Rothschild,  co-chairman has recently called for a “cleaning up” of the “balance sheet and corporate culture”. Second, the report that four buyers have been found guilty last month of taking bungs. The men worked for companies who acted as purchasing agents for oil and gas engineering projects and conspired to take bribes from bidders in exchange for insider information about contracts worth £66m in Iran, Egypt, Russia, Singapore and Abu Dhabi. These reports demonstrate that high levels of governance are essential in procurement, particularly when the organisation is stretched over a large geographical area.

http://www.economist.com/node/21547301

http://www.supplymanagement.com/news/2012/four-purchasers-found-guilty-in-66m-corruption-case/?locale=en

More on Supply Management – back to basics

The article in Supply Management called “Back to Basics” has received a number of “Likes” and generated some interesting comments through LinkedIn. Frank Gesoff said it was an “interesting article” and that there are “lots of opportunities, if you know where to look!” Mike Duran also found it interesting and raised some valid concerns about protecting the intellectual property right. I’m glad you found it interesting and thanks for your comments!