Click here to order the December 2016 issue in which this article appeared.
The direct selling channel, of which I have had the distinct honor of serving for more than three decades, can take justifiable pride in its tradition of upholding the most enviable of self-regulatory standards. Standards that, as the name implies, we have imposed on ourselves—not because we have been required to do so, but because, as direct sellers, we inherently understand that we have no greater obligation than to protect our consumers and our salespeople. We have collectively gone to great lengths to ensure our companies are able to meet this fundamental obligation. But as in every industry and business model, there is always room for improvement.
Adopted in 1970, the U.S. Direct Selling Association’s Code of Ethics serves as the cornerstone of DSA’s commitment to ethical business practices and consumer protection. Every member company pledges to abide by the Code as a condition of admission and continuing membership in DSA. The Code holds member companies accountable with an ongoing, rigorous set of mandates and responsibilities in areas such as earnings representations, product claims, sales and marketing practices, order cancellations and return policies. The Code is well-respected and effective. And it is about to become more so, with 2017 ushering in a new era of increased consumer-protection accountability for DSA member companies.
It is not enough for DSA’s Code of Ethics simply to be enforced. To ensure the necessary transparency of our business model, the Code must also be seen to be enforced. The Office of The Code of Ethics Administrator currently issues a yearly report of Code of Ethics Compliance that, while publicly available, is non-company-specific. The Association will now compile and make publicly available a new, semi-annual Code of Ethics Compliance Report that will be member-company-specific, describing compliance rates by individual companies.
DSA member companies’ steadfast commitment to stringent self-regulation—consistent with the Association’s strategic priority to establish and promote the highest ethical standards—has meant that members traditionally have been very responsive in resolving complaints received. Notably, virtually all companies respond in a full and timely way to matters raised under the Code. As laudable as this may be, our processes have, nevertheless, tended to be reactive in nature. The Code Administrator reviews and responds to issues and inquiries generated from a number of sources, including consumers and salespeople. DSA’s self-regulatory approach is set to become proactive.
Starting in 2017, the Association will implement a 100 percent review of DSA member companies. These reviews will utilize DSA staff and the Code Administrator, and a credible third-party to assist in evaluating the websites, social media pages and any other necessary and appropriate communications of member companies and their independent salesforces. Product representation and claims as well as earnings representation and claims, in particular, will be examined. Member companies’ general operating procedures and culture will also be assessed, and the reviews and assessments will be made freely available for all to see.
I am excited for the Association to be working even more closely with the members it serves. DSA member companies want the world to know what they are all about. They are immensely proud of the products, services and business opportunities they offer, and the manner in which they offer them—and so am I. That is why I’m confident that if we all fully commit to DSA’s new self-regulatory processes, the transparency of our industry will be significantly enhanced, and the myriad opportunities offered by direct selling to millions more eagerly grasped.
Joseph N. Mariano is President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.