Tesco’s lead on staff conduct ‘should catch on’

By Rod Addy

- Last updated on GMT

Tesco urges staff to report misconduct in its new code of conduct
Tesco urges staff to report misconduct in its new code of conduct

Related tags Finance

Tesco’s call to staff to report misconduct in supplier relationships in a newly launched Business Code of Conduct should prompt rival supermarkets to make similar moves, according to a leading industry expert.

Duncan Swift, partner and head of the food advisory group at accountancy firm Moore Stephens, told FoodManufacture.co.uk: “I would expect the other supermarkets to follow suit.”

He hoped that if rivals did pursue the same course, they would be committed to following it through. “Is this good news? That depends on whether or not organisations don’t only adopt such a policy, but live it. The danger is that it’s lip service only.”

Tesco is known to have been working on the staff code since at least November last year. Swift commended Tesco for its approach, as did Groceries Code Adjudicator Christine Tacon, who told this site: “Tesco has kept me informed of its work on the Code of Conduct. I am very supportive of anything that is designed to improve the culture of the groceries supply chain. This is important because it is setting the tone from the top.”

Swift said he did not believe the clause had been prompted by the investigation into Tesco’s relationship with its suppliers launched last month.

He believed it was more likely it had been at least partly motivated by probes launched by the Financial Reporting Council and the Serious Fraud Office following Tesco’s £263M misstatement of half-year profits last year.


Both bodies were named under protected disclosure laws as organisations that could protect the anonymity of whistleblowers. Tesco’s code of conduct attempts to encourage a corporate culture of transparency by stressing that all staff must report misconduct of any kind. Swift commended Tesco for its approach.

In a section of the code dedicated to accurate accounting and money laundering, Tesco urges: “Only submit financial information that is accurate and relates to the correct financial reporting period.”​ It advises staff to report suspicions that colleagues are keeping inaccurate or falsified records.

In one example given, the company offers the following scenario: “I am running a promotion in P8 and the supplier is providing £1M of funding. Can I account for the income in an earlier period since the promotion will definitely take place?”

In answer, it states: “According to normal accounting practice, income must be recorded in the financial period in which the activity takes place. It must be booked in P8 only. Talk to your finance manager for more information.”

In complete confidence

In addition to urging employees to tell line managers about inappropriate practices, it also allows them to contact advisors in complete confidence using its existing Protector Line service. The facility is run as a third-party service independent of the grocery retail chain.

Some claim much of the impetus behind the new Tesco code comes from the 2013 horsemeat scandal. In a section on food and product standards, the code offers the following example: “I am concerned that a supplier of processed meat products is using inferior quality meat in Tesco products. What should I do?”

It states: “You should raise your concerns immediately with your line manager and your local Trading Law or Loss Prevention teams who will investigate the issue. Even if the concern turns out to be unfounded, it’s important that you speak up.”

The code of conduct addresses 21 key risk areas, including ethical trading, unacceptable workplace behaviour and clear prices and marketing.

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