Supply Chain: Off the Board Agenda?

When it comes to the supply chain, the pain of the past few years appears to be a distant memory for leaders and their boards. But should it be?

Now that ports are clear, warehouses are staffed, and products are on shelves, boards are less and less concerned about supply-chain disruption. To be sure, there have been issues in the Red Sea. But supply chain disrupton didn’t crack the list of the top ten trends impacting business this year, according to a survey of more than 500 board directors by the National Association of Corporate Directors (it came in eleventh, with only 20% of directors citing it as a risk).  

That’s a dramatic reversal from just a few years ago, when—as a result of the pandemic, trade issues, and other factors—supply chain disruption regularly topped the list of biggest risks to business growth. Back then, hiring and investment to build supply chain talent and resilience were soaring, and supply chain leaders were fixtures at board meetings. “Now that the fire has been put out, supply chain issues have been moved to the back burner of the board agenda,” says Seth Steinberg, a senior client partner in the Supply Chain Center of Expertise at Korn Ferry.    

Steinberg says supply chain leaders have been unable to parlay demand for their expertise into broader C-suite roles or board appointments. To be sure, as the landscape has normalized, boards and leaders have fallen back into a reactive posture regarding their supply chains—which Steinberg says could end up costing them when the next crisis inevitably hits. Industry leaders should take a preventative approach to the supply chain, he says, much as healthcare professionals do in patient care, rather than giving it their attention only when issues arise. “Firms and boards need to keep building this muscle into a competitive differentiator,” he says.  

Leo Roberts, an associate client partner in the Supply Chain and Procurement practice for Korn Ferry in London, says supply chain leaders haven’t done a good job of translating for leaders and boards how their broader and more strategic remit could create value. “A lot of them missed the moment to elevate themselves,” says Roberts. For instance, he says, supply chain leaders have a view across the entire enterprise equalled by few others. Their role now is less about efficiency and cost savings and more about orchestrating ecosystems internally and externally. Pointing to the bank failures of early 2023 and the recent seizure of cargo ships in the Red Sea—factors which have helped create the current “perma-crisis” environment— Roberts says it’s a business imperative to include a supply chain perspective on every major strategic decision. “The knock-on effects of not doing so could be enormous,” he says.

Only a few supply chain leaders have been appointed to boards (due to a limited number of vacant seats and an emphasis on broader issues like effectiveness and composition), which means that boards seeking expertise and advice have had to find advisory or other unofficial roles for supply chain authorities, says Cheryl D’Cruz-Young, a senior client partner in the Sustainability and ESG Center of Expertise at Korn Ferry. The irony is that while board concern for supply chain disruption is waning, worry about geopolitical risk to business operations is at an all-time high. Numerous studies show geopolitical risk topping the list of concerns for leaders and boards in 2024 (it ranked seventh in the NACD’s survey, with one-third of directors citing it as a top trend impacting business this year). “Geopolitical risk and supply chain disruption are intimately tied,” says D’Cruz-Young. “Who else is managing geopolitical risk, if not supply chain leaders?”  

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