Procurement Policy – Why Is It Different For The CEO?


Anyone who has worked in procurement for a while, in pretty much any organisation, knows that the rules and policies that govern procurement spend usually don't apply to the most senior managers - the Chairman, CEO, indeed sometimes the CFO, COO and the entire Board. There are many reasons for this totally reasonable stance; here are some of the most commonly quoted by those senior paragons to justify their special status.

The procurement rules don't apply to me because:

It's urgent, and the organisation doesn't have time to go through all that ridiculous procurement process.

I'm really, really busy - and important - and I personally don't have the time to go through the process (subtly different from the above).

It's critical to the business, so we have to move immediately and I have to have total control over the supplier selection and contractual terms otherwise we're doomed, doomed I tell you.

It's top secret, so I'm not even going to tell you what it is I'm buying. Please go away.

You do know who I am don't you? I mean, you don't really think these rules apply to me?

I'm an expert - I know what we need to buy so there is no point going through any process, discussing specifications and so on.

Actually, forget that, I'm a REAL expert and know what we need to buy and exactly which supplier must supply it, and at what price, so there is absolutely nothing to discuss.

I didn't know about the rules (even though they have been communicated on the firm's website, in memos, presentations, newsletters ...)

I'm important, but really it is the Chair / CEO / Board who wants it so don’t mess with me or someone more senior will jump on your head.

Clearly, some of these justifications are better than others, and it is a key task for senior procurement people to find a "successful" way through this situation. And of course, no-one senior ever said "the procurement rules don't apply to me because I am pursuing my own interests to the potential detriment of my organisation, but I just don’t give a s**t”.

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Voices (3)

  1. Sam Unkim:

    @ Jeremy Smith:

    Cheers Sherlock !!!

  2. Jeremy Smith:

    All very relevant with the current Kath Harmeston tribunal going on and the claim and counter-claims they are all making about procurement policy compliance.

  3. Dan:

    To be fair, its usually the CEO who is ultimately responsible for deciding what the procurement policy is – and therefore they can decide what the exceptions are.

    My response in these situations is to just to advice them on the risks of their course of action – after all, procurement should be a professional advisor as well as a service provider. If the CEO still wants to go ahead, that’s their call. Just make sure to get it in writing, especially if their preferred course of action is illegal (and if necessary, rethink whether you want to carry on working there…)

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