Which practice reduces the risk of fraud or corruption in the supply chain?

• A. Increasing lead times.
• B. Implementing strong ethics policies and supplier due diligence.
• C. Eliminating supplier audits.
• D. Reducing transparency with suppliers.

Answer: (B)

Preventing fraud and corruption in the supply chain comes from establishing clear ethical expectations and actively verifying how suppliers operate. Strong ethics policies—such as a code of conduct, anti-bribery and anti-corruption rules, regular training, and whistleblower channels—create a formal framework that discourages improper behavior and provides a mechanism to report concerns. Coupled with supplier due diligence, which involves screening new suppliers and ongoing monitoring of their practices, financial health, and legal compliance, this approach establishes accountability and makes it harder for misconduct to go unnoticed. Together, these controls deter inappropriate actions, enable early detection, and help enforce responsible behavior across the supply network.

In comparison, simply increasing lead times doesn’t address governance or oversight and may even complicate processes without adding accountability. Removing supplier audits eliminates a key check that helps verify compliance, and reducing transparency with suppliers hides information that could reveal corrupt activities.