Companies continue to navigate unprecedented supply chain stresses and strains with the ultimate goal of assuring supply – and survival. Amid ongoing supply chain turmoil, many companies are implementing efforts to address vulnerabilities and improve resilience and sustainability.
Boards should help ensure that management’s initiatives to rethink, rework, or restore critical supply chains are carried out effectively, such as:
- Updating supply chain risk and vulnerability assessments
- Diversifying the supplier base
- Re-examining supply chain structure and footprint
- Developing more local and regional supply chains
- Deploying technology to improve supply chain visibility and risk management
- Improving supply chain cybersecurity to reduce the risk of data breaches
- Developing plans to address future supply chain disruptions.
Importantly, are supply chain initiatives being driven by an overarching vision and strategy? Who is leading the effort, connecting critical dots, and providing accountability?
At the same time, boards need to sharpen their focus on the company’s efforts to manage a broad range of ESG risks in its supply chain. Such risks – particularly climate change and other environmental risks, and important “S” risks such as human rights, forced labor, child labor, worker health and safety, as well as diversity, equity, and inclusion (DEI) in the supply chain – pose significant regulatory and compliance risks as well as critical reputation risks for the company.
Also read: Supply chain risk and resilience