An acclaimed not-for-profit social enterprise that works nationally to help small businesses promote their ethical, charitable and community credentials has thrown its weight behind The Journal’s Pay Fair campaign.
Trading for Good, a free online resource that launched last year, emphasises the business benefits of ethical behaviour while helping SMEs - which lack the funds and media savvy of larger corporations - get their corporate social responsibility message into the public domain.
The organisation was founded by Kay Allen OBE, who worked with the Prime Minister’s adviser on CSR, Philip N Green, on a research project into the socially beneficial activities of small businesses in the UK.
As more members join up, a clearer picture is emerging of the enormous social contribution SMEs are making - and of the difficulties they can face.
“We’re passionate about the issue of prompt payment,” Miss Allen said. “We ask members if they’ve heard of the Prompt Payment Code, or if they’ve experienced difficulties with being paid on time.
“It’s quite worrying how many have - over 80% are concerned about the issue.
“We believe that if companies claim to be socially responsible businesses, they have got to pay their suppliers on time and within a reasonable time frame.”
Miss Allen said there was typically a hierarchical structure in business transactions, with smaller companies taking the brunt of poor payment practices.
A “trickle down” effect throughout the supply chain exacerbated the problem and, while there were certain actions SMEs could take to protect themselves as far as possible, payment terms of 90 to 120 days were still being used by some firms.
Naming and shaming notorious offenders represented one way forward and customers were increasingly voting with their feet with it came to supporting ethical businesses, she said.
As far the bigger picture was concerned, further bureaucracy would be undesirable, but greater transparency would help distinguish companies making genuine strides forward from those merely paying lip service to ethical ideas.
“Prompt payment is really just a question of good business,” Miss Allen said.
“A traditional business might suggest you should take as long as possible to pay your suppliers, but that isn’t the responsible attitude.
“Big business has a lot of work to do to restore its tarnished reputation and the last thing large companies should be doing is treating small business badly.”
Through the Pay Fair campaign, The Journal is encouraging North East companies of all sizes to take a responsible and ethical approach to paying firms within their supply chain.
We are asking firms to sign the Business Ethics Pledge created by the North East Institute of Business Ethics, thereby agreeing to join with others to discuss the value of business ethics and to work with each other to transform their working environments for the better.