The ART Of Business

The Supply Chain and Shareholder Rights

When things go wrong with the supply chain, shareholders often shoulder and suffer a disproportionate portion of the pain. Further, the ability of shareholders to influence a company's supply chain has historically been almost nonexistent.

It seems things are about to change.

A new rule from the Securities and Exchange Commission (SEC) has opened the door for shareholders to play a far greater role in determining who serves on a corporate board.

SEC Chairwoman Mary Schapiro says the new rule will "enhance investor confidence in the integrity of our system of corporate governance."

Maybe. Time will tell.

But certainly, now, there is a strong possibility that investors, whether hedge funds, unions, employee-blocks, or others, may be able to meddle in the day-to-day affairs of a company.

For those managing supply chains, such a thought perhaps sends shivers down the spine.

Whatever the reaction, the notion that an investor, sometimes with unknown motives, might sway how a company's supply chain is organized OR reorganized is one to seriously consider.

This seems one of those moments when supply chain professionals need to communicate once again the strategic importance of their role within the organization.

TAGS: Supply Chain
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