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CIPS L4M4 Exam - Topic 3 Question 50 Discussion

A chief procurement officer (CPO) reviews a tender process and recommendation before making the final submission to the board of directors for approval. The CPO notices that the evaluation team assessed technical and financial capacity but did not conduct an assessment and due diligence on the supplier's environmental, social, governance, anti-bribery, and corruption practices and processes. The CPO has decided to forward the report to the board for approval and seek reassurance from the supplier at a later date once the contract has been signed. Was the CPO's decision the correct one?
B) No, evaluation of suppliers' compliance is important to protect the buying organisation against reputational risk and other losses
A) Yes, because only financial and technical capacity matters in the evaluation of strategic contracts
C) Yes, as compliance to environmental, social and governance will result in an unjustified increase in supplier costs
D) No, because a supplier's practices become confidential once a contract has been signed

CIPS L4M4 Exam - Topic 3 Question 50 Discussion

Actual exam question for CIPS's L4M4 exam
Question #: 50
Topic #: 3
[All L4M4 Questions]

A chief procurement officer (CPO) reviews a tender process and recommendation before making the final submission to the board of directors for approval. The CPO notices that the evaluation team assessed technical and financial capacity but did not conduct an assessment and due diligence on the supplier's environmental, social, governance, anti-bribery, and corruption practices and processes. The CPO has decided to forward the report to the board for approval and seek reassurance from the supplier at a later date once the contract has been signed. Was the CPO's decision the correct one?

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Suggested Answer: B

Ethical and responsible sourcing requires that environmental, social, governance, anti-bribery and corruption (ESG/ABC) considerations are assessed before contract award, not after. Failure to conduct due diligence exposes the buying organisation to reputational damage, legal sanctions, financial losses, and supply chain disruption. Seeking reassurance post-contract removes leverage and weakens governance controls. CIPS guidance stresses that supplier evaluation must be holistic, covering technical, financial, and ethical compliance to ensure risks are identified and mitigated early. Strategic contracts, in particular, demand robust due diligence to protect organisational integrity and stakeholder trust.


by Gilberto at Jun 21, 2026, 11:16 PM

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Stanford
4 days ago
Exactly! It's about long-term sustainability, not just costs.
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Amber
9 days ago
Not at the cost of ethics! We need to know the supplier's practices.
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Stefany
14 days ago
But technical and financial capacity should come first, right?
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Stanford
19 days ago
Agreed! Reputation is at stake. Can't ignore those factors.
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Amber
25 days ago
I think the CPO's decision is wrong. Compliance matters!
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Long
30 days ago
I don’t see how ESG factors justify higher costs.
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Precious
1 month ago
Wait, so they’re okay with signing first and checking later? That seems risky.
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Rebbecca
1 month ago
But isn't it just about the bottom line?
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Sage
2 months ago
Totally agree, reputational risk is no joke.
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Dorinda
2 months ago
I think compliance checks are super important!
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German
2 months ago
I thought we learned that supplier practices should be assessed before signing a contract, so I’m leaning towards option B as well.
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Jettie
2 months ago
I feel like option B makes the most sense since protecting the organization from risks is crucial, but I wonder if the CPO had any other reasons for their decision.
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Sommer
2 months ago
I’m not entirely sure, but I think we practiced a case where ignoring compliance led to major reputational damage for a company.
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Caprice
2 months ago
I remember discussing the importance of due diligence in supplier evaluations, especially regarding ESG factors. It seems risky to skip that step.
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