By Alvin Albert Okoe MINGLE
As the world of corporate governance evolves, so must our perspectives regarding Procurement governance.
The role of Chief Procurement Officers (CPO’s) has long transcended traditional purchasing functions, traditionally reporting into Finance, to become a pillar of corporate strategy and execution.
Globally, organizations now understand that procurement is not merely a cost center but a strategic lever that drives innovation, risk management, and sustainable competitive advantage.
The role of the CPO has evolved dramatically over the past few decades, shifting from transactional purchasing to a more strategic, cost-management, value driven function that shapes corporate direction and has a direct impact on the organisations bottom line.
In Ghana, we are increasingly aligning with global best practices in corporate governance. Embracing a model where procurement is seen as a strategic partner can enhance competitiveness, attract foreign investment, and foster sustainable economic development.
This paradigm shift calls for a rethinking of traditional hierarchical structures in favor of a more inclusive, expertise-driven board composition. Here is a case for the inclusion of CPO’s on various boards and why Ghanaian corporations must prioritize their board-level inclusion:
Cost control and value creation
CPO’s essentially oversee a significant portion of organizational spending. In fact, they are the only team mandated to spend the organisations resources on behalf of budget holders.
Their expertise in supplier markets, contract management, and cost drivers enables them to influence budgeting decisions and deliver measurable value through cost savings and efficiency gains.
Elevating this expertise into board-level discussions ensures that procurement strategies align with broader financial and operational objectives. Ghanaian companies that have restructured their procurement processes have seen improved cost efficiencies and better allocation of scarce capital.
This shows a clear path to instigating cost effectiveness by making CPO’s also accountable to the board, since theoretically, they are the only department that is mandated to spend the company’s financial resources.
Risk management and compliance
The increasingly complex global and supply chain is circled with various risks, as many as you can imagine, from geopolitical instability to regulatory changes and cyber security threats.
Ghana is not insulated from these challenges. CPO’s are strategically positioned by construct and training to identify and mitigate such risks, ensuring continuity of supply and compliance with international standards.
Their elevated role in board decisions helps organizations find their way around disruptions and maintain corporate resilience, thus bouncing forward in the face of these various risks that we are prone to daily.
Enhanced governance and transparency
Ghanaian companies stand to benefit from improved corporate governance and adherence to international standards through the inclusion of CPOs on boards.
Their expertise in supplier evaluation and contract transparency can help mitigate corruption and ensure that procurement practices meet global benchmarks.
Given that procurement processes have often been associated with corruption in both government and private sectors, making CPOs accountable to the board enhances transparency and accountability.
Sustainability and ethical sourcing
With increasing pressure from stakeholders and regulatory bodies worldwide, sustainability and ethical sourcing have become key business pillars, no doubt. CPOs offer valuable insights into environmental, social, and governance (ESG) practices.
Their involvement in board deliberations ensures that sustainability goals are woven into the very fabric of corporate strategy.
In Ghana, companies are strongly beginning to prioritize ethical sourcing practices, such as sustainable procurement by manufacturing companies which not only improves their market reputation but also contributes to long-term responsible growth.
This opens more doors to global markets with a direct positive impact on our micro and macro economies.
Data-driven resource allocation
Ghana remains a business environment where capital is at a premium. The strategic oversight provided by CPO’s ensures that public and private funds are allocated efficiently.
Their use of robust procurement analytics systems equips them with real-time data, enabling the board to make informed decisions on resource allocation. It has been seen that the involvement of CPO’s can lead to better negotiation outcomes, cost savings, and ultimately enhanced shareholder value.
Strategic partnerships and innovation
CPO’s are in a unique position to foster strategic partnerships with suppliers that drive innovation to meet Corporate objectives. By engaging with both local and international partners, they can facilitate various partnerships that boost competitiveness.
For example, partnerships in Ghana’s growing technology and agriculture sectors have led to the development of innovative solutions that enhance production efficiency and open up new market opportunities.
Supply chain resilience and agility
In an environment where market dynamics can change rapidly, the ability to adapt quickly is critical. CPOs can build resilient and agile supply chains by diversifying supplier bases and implementing risk mitigation strategies.
Ghanaian companies, particularly in the resource sector, have benefited from such proactive measures by reducing their vulnerability to supply disruptions and ensuring business continuity even during economic downturns.
Conclusion
The inclusion of Chief Procurement Officers into boardrooms is not merely a trend, it is a strategic move we should consider adopting.
The traditional method where Procurement generally reported into another function is outmoded and frankly not as efficient as both teams may at times have divergent goals and targets.
Globally, companies that leverage procurement expertise at the very highest level achieve excellent cost control, risk mitigation, and innovation.
In Ghana, where economic growth and governance challenges coexist, empowering CPO’s with a voice in board decisions can drive sustainable development, enhance transparency, and improve overall corporate performance.
By adopting best practices and advocating for regulatory support, Ghanaian corporations can redefine procurement as a key driver of strategic success.
This comprehensive approach not only addresses cost efficiency and risk management but also champions innovation, resilience, and ethical business practices elements critical for thriving in today’s competitive and capital-sensitive environment.
>>>the writer is a Senior Managing Partner at Fitzgerald-Bassey Consultancy Ltd
