The debate on whether Procurement should have a seat at Board level has simmered on for several years now, without much actual progress in the number of procurement professionals reaching the top.
The question now is not so much whether Procurement deserves a seat on the Board, but whether it even needs one in order to shape and influence strategy.
It's undeniable that Procurement's function within business has changed. While the bottom line is still an essential focus, procurement is now seen to add value through nurturing long-term supplier relationships, tech innovation and supporting overall business strategy.
Procurement experts therefore have more opportunity than ever before to become big influencers within a company. But does that influence need to be at Board level?
Julie Neal, former Commercial Procurement Director at Burberry, said: “I don’t think it’s necessary to have a seat at the board to shape strategy but what you do need is amazing sponsorship at that level. To achieve that you need to demonstrate results and build relationships, and I think some procurement professionals don’t do so well at building up stakeholder relationships at that level. They are focused more on the practical elements of the role rather than strategy.”
Jonjo Hobbs, MD of Capita Procurement Solutions, agrees that it’s up to procurement professionals to change perceptions of the function and ensure they have buy-in from all areas of the business – and that not everyone is getting the messaging right.
Jonjo said: “We tend to over overcomplicate what we do. Speak a language that makes sense to everyone – don’t just use procurement terminology.
“For many companies there is still a reticence to having a procurement voice on the board, though I hope in five years’ time we will see many more. The more integrated Procurement is to corporate ambitions and targets the better.
“I don’t think there’s one significant moment that will change that. Procurement just needs to work harder and closer with other areas. “
Advances in technology have helped raise Procurement up and increase its sphere of influence in recent years – does this offer the best chance for Procurement to seize the day and make the function indispensable at the highest level?
Nitin Patel, Head of Group Procurement at Vue Entertainment, said: “Technology is hitting every sphere of the business environment but if we allow tech to rule procurement all you’ll see is numbers, not the added benefits that procurement brings. In terms of progressing upwards - do the job effectively, show the strategic benefits of what you’re doing.”
At Bramwith our feeling is that as Procurement often comes under the auspices of Finance rather than being seen as a fully separate function, many businesses don't see the need to field someone from Procurement at Board level as well as a CFO.
Katie Jacobs of Supply Management points to the slimming-down of boards in recent years as a further barrier to making room for Procurement.
Katie said: “There are far fewer executives taking seats on them, the majority of the board is made up of NEDs and SEDs. On most boards therefore, listed ones at least, the only execs present are likely to be the CEO and CFO.
“I think it is a narrow view to assume that one must sit on the board to shape strategy. If you have credibility, act as a business leader rather than a functional expert, think strategically and have personal impact, there are plenty of other ways to take a leading role in board level discussions – as our recent Procurement Power List shows."
The consensus from industry leaders is clear - whether you’re aiming for the C suite or the Board the key to climbing that ladder is building relationships across all areas of the business, thinking strategically and communicating clearly the value of the procurement function.
So what are the next steps for ambitious procurement professionals?
This interview with David Smith (CB FCIPS) offers five tips for finding a place at the top table https://bloom.services/news/top-5-tips-putting-procurement-top-table/
And here’s a longer read from CIPS on how to build the brand of procurement and supply chain management: https://www.cips.org/Documents/cips-for-business/Building_the_Brand_of_Procurement_and_Supply.pdf
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