Steven Butts
Head of Corporate Responsibility & GSCOP Code Compliance Officer
Groceries Code Adjudicator – UK Conference
The role of the Code Compliance Officer…
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Wm Morrison Supermarkets PLC
Key stakeholders in food retail
Code Compliance Officer’s role and duties
Working with the Groceries Code Adjudicator
Some thoughts…
Wm Morrison Supermarkets PLC
Stakeholder interests - ‘responsible business’
Fair dealing means
we are a valued
customer with
positive and flexible
relationships & can
support resource
efficient supply
chains
More effective
engagement and a
trusted thought leader
Opportunity for
enhanced reputation
through engagement
and partnerships
Drives footfall, loyalty
and attracts new
customers
Improves financial
performance, a more
successful business –
which mitigates risk
Supermarket of
choice with stronger
links into local issues,
better recruitment and
footfall
Attract and retain the
best talent offering a
better customer
experience
The Groceries Code framework…
• GSCOP came into force in 2010
• The ‘Order’ requires retailers to
establish and maintain the role of a
‘Code Compliance Officer’
• The Adjudicator was appointed in 2013
with power to:
– impose a levy to fund the GCA’s office
– regulate the operation of the ‘Code’
– request information & documentation
– launch investigations
– arbitrate disputes
– require remedial action
– name and shame
– impose significant fines
– recover investigation costs
– publish guidance
1. Code Compliance Officer … a point of contact
The Order - PART 4, Article 9
A Designated Retailer must appoint a
suitably qualified employee as the Code
Compliance Officer……
..[and] must ensure that the Code
Compliance Officer will be:
• … provided with resources and access to
information & the Buying Team;
• … a point of contact for Suppliers and any
authority;
• … independent and not managed by any
member of the Buying Team and
• Head of Corporate Responsibility, legally
qualified, reporting into the Management Board
& Main Board.
• … based at head office, with open access to all
parts of the business, working closely with
Group Legal
• … details at morrisons.co.uk/cr (alongside our
GSCOP ‘Senior Buyers’)
• … part of the Corporate Services Division
• … available to discuss with Suppliers any
decisions made by the Designated Retailer.
• … part of our escalation process
2. Code Compliance Officer… regulatory reporting
The Order - PART 4, Article 10
A Designated Retailer must ensure that, for
each complete financial year, the Code
Compliance Officer delivers an annual
compliance report to the OFT [Competition
& Markets Authority], copied to the
Ombudsman [Groceries Code Adjudicator
..[and] the compliance report must :
• … be approved by the Designated
Retailer’s audit committee;
•… three reports now submitted since 2010
• … approved by our Main Board in the form of
our Corporate Compliance & Responsibility
Committee
• … record details of alleged or actual
breaches and steps taken to rectify any
formal ‘Disputes’ (i.e. escalated matters up
to Arbitration); and
• … covers recorded allegations and activity
across trading and any formal ‘Disputes’ in a
format stipulated (originally) by the OFT
• … detail other steps taken during the year
to ensure compliance e.g. training
• … reports on training and any other related
matters
3. Code Compliance Officer… business reporting
The Order - PART 4, Article 10 … cont’d.
• … A Designated Retailer must ensure that
the Code Compliance Officer provides such
other reports as are necessary…. for
effective oversight [to the audit committee,
relevant non executive director, Chief
Executive or Managing Director]; and
• … a summary of the compliance report
must be included in the Designated
Retailer’s Annual Company Report
•… regular (monthly) reports to the Management
Board and routine communication with
Corporate Services Director & General Legal
Counsel & relevant Management Board Members
• … included in last 2 Company Annual Reports
4. Code Compliance Officer… training
The Order - PART 4, Article 8
• A Designated Retailer must provide training
(and re-training) on the requirements of the
Order & the Code… each calendar year…
• … 4th year– formal training, guidance materials
and on-line testing
• … new buyers trained within one month of
arrival and this is tracked through our learning
management system
• … this year we’ve developed a new ‘Know your
Responsibilities’ module with blended training:
• formal group session for all of the buying
team and linked business units
• mixed with other focus areas such as key
trading policies and pricing rules
• … this is backed up by additional online
testing, an intranet site and team training or
presentations delivered by the CCO or legal team
5. Code Compliance Officer… dispute management?
The Order - PART 5, Article 11
• Art. 11(1) A Designated Retailer must
negotiate in good faith with a Supplier to
resolve any dispute arising under the Code.
• Art. 11(2) A ‘Dispute’ will arise under the
Code when....a Supplier wishes to initiate
the dispute resolution procedure set out in
Article 11 after informing the Code
Compliance Officer that it believes there has
been a breach of the Code
• There follows a 21 day period after a
Dispute is formally notified for the parties to
try and agree - but if not, then within the
next four months the Supplier could elect to
go to formal Arbitration (processes set out
in the Arbitration Act 1996)
• … Most enquiries are informal and start with
the Buyer – can be escalated to a GSCOP Senior
Buyer (Category Director) and are usually dealt
with within the Buying Team
• … the Buying function may seek advice from
Group Legal, or the Code Compliance Officer at
any time
• … matters that can’t be resolved may then
escalate to a ‘Dispute’.
Working with the Groceries Code Adjudicator
Business as usual
• Regular informal engagement as CCO
• Quarterly diary meetings with the GCA &
Officials from the GCA’s team
Senior level engagement
• Introductory meetings with our Chief
Executive and Management Board members
• Visit to Head Office
• GCA undertook a briefing session with our
GSCOP Senior Buyers
The Order & the Code in operation
• Formal annual reporting
• Responding to a formal enquiry from the
GCA on our multi-channel programme
• Discussing structural issues in advance
Views on the regulatory framework…
GSCOP - The context…
Some thoughts…
1.
Unusual application of regulation in
business to business relationships
1.
Continue to foster greater understanding
of the Code and its application
2.
Implies ‘supra-contractual rights’ into
trading terms – we are establishing ‘new
case law’ without a judicial framework
2.
More detailed guidance is helpful –
uncertainty is not good for business or
customers
3.
It affirms the perception of the dominant
retailer – but the market is not that
straightforward – wider stakeholder
interest and many key suppliers are
large global entities – the Code only
works one way…
3.
Encourage suppliers to talk to retailers
first - solutions orientated approach
4.
Appraisal of the role of the Code
Compliance Officer – a broad corporate
overview and specialist facilitator
4.
Application only to a limited number of
food retailers
5.
Support for a pragmatic and positive
approach based on driving or enhancing
supply chain efficiency
5.
Requires careful framework
management to avoid unanticipated
regulatory extension