CIPS Managing Ethical Procurement and Supply L5M5 Exam Questions

Answer : D

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The Equalities Act 2010 provides legal protection against discrimination in the UK. The L5M5 study guide (p.35) lists the protected characteristics, which include disability, pregnancy and maternity, age, race, sex, sexual orientation, gender reassignment, marriage/civil partnership, and religion/belief. Weight is not included as a protected characteristic. For procurement, understanding equality legislation is vital to ensuring suppliers uphold fair treatment of employees and do not discriminate unlawfully. Organisations must embed these protections into contracts and supplier codes of conduct.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.35

Answer : D

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The L5M5 study guide (old p.67, new p.95) explains that there is no limit to compensation claims for breaches of the Equalities Act 2010. By contrast, unfair dismissal claims (not linked to discrimination) are capped at the lower of 83,682 or 52 weeks' gross pay. Discrimination claims, however, are unlimited, reflecting the seriousness of breaches. Procurement professionals must ensure suppliers comply with equalities legislation, as non-compliance can lead to unlimited liability and reputational damage.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.95

Answer : A, B, C

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Social Security in the UK provides benefits such as sick pay, redundancy support, pensions, and maternity/paternity payments. The L5M5 study guide (p.93) specifies that payments can be made in cases of sickness (A), loss of employment (B), and retirement (C). Benefits are not provided simply for changing jobs (D) or marriage (E), as these do not affect financial or employment security. Procurement professionals need to understand social security systems, especially when working with international suppliers, since welfare provisions differ globally and affect labour conditions.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.93

Answer : A, B

Comprehensive and Detailed Explanation From Exact Extract of Documents:

The International Labour Organisation (ILO) has defined core labour standards. According to the L5M5 study guide (old p.60, new p.88), these include freedom of association (A) and payment of a living wage (B). Other standards include the right to unionise, elimination of forced labour, and restriction of child labour. Equal opportunities (C) and protection from job insecurity (D) are important labour rights but not classified as core ILO standards. Procurement professionals must ensure suppliers comply with these standards to avoid reputational, legal, and operational risks.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.88

Answer : D

Comprehensive and Detailed Explanation From Exact Extract of Documents:

SA8000 is a globally recognised certification standard for Social Accountability. The L5M5 study guide (p.264) confirms that it measures compliance with ethical labour practices such as child labour elimination, safe working conditions, fair wages, and working hours. It does not cover quality (A), environmental management (B), or risk management (C). For procurement professionals, SA8000 provides assurance that suppliers operate ethically, helping organisations meet CSR/ESG commitments across supply chains.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.264

Answer : A

Comprehensive and Detailed Explanation From Exact Extract of Documents:

SWOT analysis examines both internal factors (Strengths and Weaknesses) and external factors (Opportunities and Threats). According to the L5M5 study guide (p.55), SWOT is a strategic tool for assessing organisational drivers and making informed procurement decisions. In contrast, STEEPLED analyses external macro-environmental factors (social, technological, economic, environmental, political, legal, ethical, demographic). GDP (Gross Domestic Product) is an economic indicator, not an analysis tool, while ABC analysis categorises suppliers or inventory based on importance and value, not internal strategic drivers.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.55

Answer : D

Comprehensive and Detailed Explanation From Exact Extract of Documents:

Knowledge transfer and Intellectual Property (IP) rights are often the most difficult elements to manage during contract termination. The L5M5 study guide (p.241) explains that physical assets and documents can be returned easily, but IP rights and tacit knowledge (e.g., processes, experience, trade secrets) are harder to transfer and may be contested between parties. Disputes may arise over ownership of IP developed during the contract. Procurement professionals must establish clear exit strategies early in the contracting process to address these issues and avoid disputes at termination. This ensures continuity and protects business interests while maintaining ethical standards.

Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.241