GTDC: Partner Code of Conduct Focuses On Integrity

While some solution providers are pushing for a standardized code of ethics for their peers, the Global Technology Distribution Council enacted its own Partner Code of Conduct last year, due to increased compliance standards putting more pressure on vendors.

The purpose of the GTDC code is to reassure manufacturers that their distributors will live up to certain standards that meet regulatory compliance measures regarding the sale and distribution of their products and services, said Tim Curran, CEO of the council.

’Certainly in the U.S., given the Enron collapse and the financial crisis, there’s lots of focus on financial integrity and financial reporting. Companies are under tight regulatory control. All vendors have lots of compliance issues to remain focused on,’ Curran said.

In many cases, vendors can be held liable for the behavior of their channel, Curran said, which means they need to ensure their partners meet certain standards.

’If you’re a big vendor you need to be sure you comply with international regulations. You’re better off working with the GTDC. That makes CEOs and CFOs sleep better knowing they can count on partners to keep them out of trouble,’ Curran said.

The code states that GTDC members will adhere to applicable international anti-corruption, competition and anti-trust laws, export laws and laws that protect the environment, Curran said.

’It’s a statement of principals. Sometimes in the channel, resellers and other channel companies sometimes play in the gray and dark space. We’ve adopted this code to say we members are compliant and you can trust us. We make solid business partners,’ Curran said.

Curran said drafting and enacting a code of ethics was fairly easy with nine U.S.-based distributors. But developing an ethics code for thousands of solution providers would not be so easy.

’It certainly would be worth monitoring. Not impossible but not easy to put together an effective code of behavior for resellers,’ he said.

Next: VARs Get Some Advice

One piece of advice Curran offered for VARs is that if they spot unethical behavior, go to great lengths to correct the problem before it spreads like a virus.

’In a company, when unethical behavior takes place, one of the best defenses is for a company to demonstrate that they are making a sincere effort to educate and train their workforce,’ he said.

’If you go to a judge and say in the last six months, 98 percent of our employees been through this [ethics training] program and we have certified them, that looks good. The judge might say, 'OK, the guy who violated is rogue, we blame him, not you.' You have to make a sincere effort to comply with law," Curran said. "At the reseller level, the industry should make an effort to educate VARs about the risks and we’d all benefit from this. It’s not easy, snap fingers and you’re done. But you have to make an effort.

Curran said he hasn’t heard from distribution executives about a spike in unethical behavior among their VAR customers, but he wouldn’t be surprised if that is the case due to the economic challenges many small businesses face.

’In tough times, people sometimes do things they haven’t had to do. I will say this. In the downturn of 2002, we had a fairly high bankruptcy rate among resellers. In the run-up to the Internet bubble, lots of people were selling tons but their infrastructure was unstable. This time, I’ve heard anecdotally that the bankruptcy rate is much lower.’

The following is the GTDC’s Partner Code of Conduct:

We, the members of the Global Technology Distribution Council, representing the world's largest wholesale information technology distributors, hereby affirm the importance of adhering to the highest standards of legal and ethical conduct in the technology distribution channel around the globe. To that end we agree to the following principles to govern our conduct:

Anti-Corruption To comply with anti-corruption laws, including but not limited to the United State Foreign Corrupt Practices Act, everywhere we do business and not to offer money or anything else of value to government officials in order to obtain or retain business. Competition and Antitrust Law To comply with applicable competition and antitrust laws everywhere we do business. Export Laws To comply with the export laws of the United States of America including the EAR and OFAC regulations, as well as the export laws of the other countries in which we do business. Environmental Laws To comply with laws protecting the environment, such as WEEE and ROHS, everywhere we do business. Privacy To comply with laws governing protection of privacy everywhere we do business. Cooperation with Investigations To reasonably cooperate in any government investigation of wrongdoing in the channel. Anonymous Means of Communication To have means of anonymous communication such as hotlines in our companies to the extent permitted by law and not to retaliate against whistleblowers. Code of Conduct To have written codes of conduct to establish our expectations for appropriate behavior and to communicate these expectations to our respective employees. Relations with Vendors and Customers To encourage our vendors and resellers to also adhere to these principles. Dated this __ day of __, 2009 ________ Tim Curran, CEO of GTDC _________ Arrow Electronics, Inc. ________ Avnet, Inc. _________ Bell Microproducts ------------- D& H Distributing ------------ Ingram Micro Inc. -------------- Scansource, Inc. --------------- Synnex Corporation ---------------- Tech Data Corporation --------------- Westcon Group, Inc.