Supply Chain

The Supply Chain and Shareholder Rights

Aug. 27, 2010

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.

About the Author

Andrew R. Thomas Blog | Associate Professor of Marketing and International Business

Andrew R. Thomas, Ph.D., is associate professor of marketing and international business at the University of Akron; and, a member of the core faculty at the International School of Management in Paris, France.

He is a bestselling business author/editor, whose 23 books include, most recently, American Shale Energy and the Global Economy: Business and Geopolitical Implications of the Fracking Revolution, The Customer Trap: How to Avoid the Biggest Mistake in Business, Global Supply Chain Security, The Final Journey of the Saturn V, and Soft Landing: Airline Industry Strategy, Service and Safety.

His book The Distribution Trap was awarded the Berry-American Marketing Association Prize for the Best Marketing Book of 2010. Another work, Direct Marketing in Action, was a finalist for the same award in 2008.

Andrew is founding editor-in-chief of the Journal of Transportation Security and a regularly featured analyst for media outlets around the world.

He has traveled to and conducted business in 120 countries on all seven continents.