Introduction:
In the realm of procurement, the term "shareholder" holds a distinct significance that goes beyond its traditional use in corporate governance. Shareholders, typically individuals or entities that own shares in a company, play a crucial role in shaping procurement strategies and decisions. This article delves into the concept of shareholders in procurement, providing examples and case studies to illustrate their impact.The Role of Shareholders in Procurement:
Shareholders exert influence on procurement practices through their investment in a company. While procurement is often associated with sourcing goods and services at optimal costs, shareholder concerns can extend these priorities to environmental sustainability, social responsibility, and ethical sourcing. For instance, if a company's major shareholders prioritize environmentally-friendly practices, the procurement department might emphasize sourcing from suppliers with robust sustainability initiatives.
Examples:
1. Sustainable Procurement: Shareholders of a global retail corporation demand a more sustainable supply chain. In response, the company's procurement division partners with suppliers who adhere to eco-friendly production methods, reducing the carbon footprint of its products.
2. Local Sourcing: Shareholders of a food and beverage company express interest in supporting local communities. The procurement team adjusts its strategy to prioritize sourcing ingredients from local farmers, aligning with shareholder values and positively impacting the local economy.
Case Studies:
1. Nike's Ethical Procurement: Nike, a multinational footwear and apparel giant, faced shareholder pressure due to concerns over labor practices in its supply chain. Shareholders urged the company to address these issues, leading Nike to revamp its procurement policies, enforce stringent supplier standards, and increase transparency.
2. Apple's Conflict Minerals Challenge: Apple's shareholders highlighted the use of conflict minerals in its products, contributing to human rights abuses in certain regions. In response, Apple's procurement approach underwent a transformation, as the company worked to trace and eliminate conflict minerals from its supply chain.
In both these cases, shareholder concerns prompted significant shifts in procurement strategies. These examples underscore how shareholders can impact not only the financial aspects of a company but also its ethical and social dimensions.
Conclusion:
Shareholders hold a unique position in shaping procurement practices. Their priorities extend beyond financial gains, encompassing areas such as sustainability, ethics, and social responsibility. Companies that recognize and align their procurement strategies with shareholder values often benefit from increased investor confidence, positive public perception, and a more resilient supply chain. The examples of Nike and Apple further emphasize that the symbiotic relationship between shareholders and procurement can drive positive change on a global scale.
