Market Union | Combating Corruption and Uphold Integrity Meeting

On March 10, the Group’s combating corruption and uphold integrity meeting was held via a live connection between Ningbo and Yiwu. President Tom Tang, Legal Department, and all discipline inspectors attended the meeting.

Fong Zhang from the Administrative Department proposed to conduct face-to-face conversations with all colleagues to eliminate supervision blind spots, dig deep into “major issues” from seemingly trivial “small gifts”. It is necessary to build a “cordial” and “clean” business-to-business relationship with suppliers, clearly define the boundaries of rewards and punishments. We should take measures such as order preference, order reduction, or termination of cooperation to address corruption at the source.

Moreover, the scope of background checks should be broadened and tight control should be exerted over in-service betray. Long-term tracking of feedback on clues from former colleagues should be carried out while more attention should be paid to trade secret infringement. Personal information reporting mechanism should be gradually implemented to control corruption risks in a targeted manner.

Senior Manager of Legal Department Icey Lu focused on job embezzlement, commercial bribery, losing case, and improper overseas transactions. By citing cases, she warned about the legal red lines of business-related corruption. She believed that combating corruption efforts should combine tough and soft measures.

Based on hard defenses such as technical encryption and institutional checks, we should adhere to building a cultural foundation, enabling business colleagues to calculate the economic accounts of “a kickback”, the freedom accounts of “a yin-yang contract”, and the dignity accounts of “a leak of secrets”, and continuously promote an integrity-based culture.

Lynn Zhang from GREENHILL shared her experience from three aspects: “propaganda, conversation, and investigation”. She suggested regularly organizing integrity-based employment exchange meetings, publicizing typical cases, and closely monitoring the handling of gifts, red envelopes, and transfers. A corruption accountability mechanism should be established, and flexible integrity-related conversations with responsible persons should be carried out.

Different clues should be collected according to different positions such as procurement, quality inspection, and research and development. Rotation of key positions should be strengthened to avoid the establishment of improper interest relationships with suppliers. Regular return visits to core suppliers should be carried out and problems should be used to trace the causes and screen for clues to comprehensively supervise related colleagues.

Jack Gao from HOUSEWARE DIVISION OF TW analyzed the motives behind actively soliciting and passively accepting kickbacks and red envelopes from his own procurement work. He believed that the primary task of procurement work is to dig deep for profits and ensure the development of high-quality products at the lowest cost. He proposed preventive measures such as cross-ordering by new and old purchasers, inquiry-based competition of large order, and supplier resource sharing to continuously reduce the breeding ground for red envelopes and kickbacks.

Timber Yan from Administrative Department proposed the separation of the three powers in procurement, namely “screening, price negotiation, and signing”, the establishment of a “blacklist” mechanism for delinquent suppliers, the implementation of “anonymous reporting with substantial rewards upon verification”, and the introduction of a “Code of Integrity”. These measures aim to further improve and strengthen the existing mechanism system.

In addition, a “Sunshine Purchasing Award” should be established, and an “Anti-Bribery Agreement” should be signed with suppliers to jointly build an integrity-based ecosystem. Furthermore, technology-enabled and coordinated efforts should be deepened, and a special inspection team composed of “discipline inspection + legal affairs + IT” should be formed to conduct full-link monitoring using the ERP system.

Group’s legal advisor Yang Yu suggested that in the context of the company’s business development and the continuous expansion of the management scope at all levels, the construction of three mechanisms, namely the “contract-based system”, the “reporting system”, and the “investigation system” should be promoted to strengthen daily education, supervision, and clue handling.

The combating corruption work system and various business processes should be improved to ensure that the basic principles of “dare not, cannot” are effectively implemented. Combating corruption efforts should follow the principles of “effectiveness”, “long-term effectiveness”, and “ease of operation” without engaging in formalism or short-term management nor affecting normal business operations.

President Tom Tang emphasized that for private enterprises, clues are the key to determining the success or failure of the combating corruption struggle. We should be good at using clues to discover more clues and not let any trace go unnoticed. Discipline inspection work should be carried out in a down-to-earth manner. We must firmly oppose opaque and mysterious purchasing behaviors.

Regardless of seriousness of the circumstances or the amount of money involved, we should fight to the end and impose strict punishments. It takes a good blacksmith to make good steel. Discipline inspectors should be adjusted dynamically according to the situation, especially strengthening the supervision power in remote areas.

We should not regard simple meeting arrangements and document distribution as the actual implementation of combating corruption work. We should deeply study the combating corruption experience of world-class enterprises such as Alibaba, Tencent, and ByteDance, refining the “Three Main Rules of Discipline and Eight Points for Attention” item by item, and maximize the educational and deterrent effects of historical and typical cases.

What is our original aspiration? For whom are we striving? Today, our biggest difficulty lies within us, not outside; our biggest struggle is within us, not outside. This is the final struggle. Let’s unite and strive for a better tomorrow!