GRF · Governance Nexus
Corporate governance and supply chains
Corporate governance decides how a company is directed and to whom it answers. Supply chains extend that question beyond the firm: environmental, human rights and integrity risks often arise at suppliers several tiers away, where the company has influence but not control. Due diligence is how companies identify, prevent, mitigate and account for those impacts. This page sets out how governance failure travels along value chains, how it can be read, and which decisions sit with boards, regulators and investors.
Key facts.
Corporate governance and supply chains: how the risk develops.
Business governance and due diligence. The dossier below sets out how the risk develops, what is measured, where the data come from, how it is modelled and who decides.
Risk sits where visibility ends
Most firms know their direct suppliers but not the tiers below. Forced labour, deforestation, unsafe conditions and bribery concentrate where traceability stops, and contractual distance becomes a reason for not knowing.
Incentives push risk downstream
Price pressure, short lead times and late order changes are set at headquarters and absorbed by suppliers. Codes of conduct then ask suppliers to meet standards that the buyer's own purchasing practices make harder to meet.
Audits stand in for due diligence
Announced social audits and certificates can become a substitute for understanding risk. They sample a moment, can be prepared for, and rarely reach workers' grievances or unauthorised subcontractors.
Disruption propagates through concentration
Single-source inputs, concentrated logistics hubs and shared sub-suppliers link firms that believe their chains are separate. A failure at one node becomes a sector-wide shock, and the governance questions follow the loss.
Activity and hazards in Asia.
Night lights, population density and flood water over Asia, from NASA GIBS. Each layer carries its own date.
The interactive map needs JavaScript; the layer list and sources are below.
Layers 3
Activity and hazards, for this page
Keyboard, with the map focused
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Latest available
NASA GIBS / EOSDIS · ASTER GDEM (METI, NASA) · Blue Marble (NASA) · © OpenStreetMap contributors (ODbL) · Natural Earth
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Activity and hazards, framed on Asia.Satellite and model products as NASA publishes them, each with its own date. They are indicators, not assessments of any place.
Data: NASA GIBS · ASTER GDEM · Blue Marble · © OpenStreetMap contributors · Natural Earth · NASA EONET · U.S. Geological Survey · NOAA GOES-East ABI GeoColorSources and licences
- We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). NASA open data
- We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS). Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). NASA open data
- VIIRS Black Marble night-time lights, NASA Goddard Space Flight Center; distributed by the NASA Level-1 and Atmosphere Archive and Distribution System (LAADS DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). NASA open data
- Center for International Earth Science Information Network (CIESIN), Columbia University. 2018. Gridded Population of the World, Version 4 (GPWv4): Population Density, Revision 11. NASA Socioeconomic Data and Applications Center (SEDAC). Licensed under CC BY 4.0. Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). doi:10.7927/H49C6VHW. CC BY 4.0
- VIIRS near-real-time products (flood, land surface temperature, snow cover, corrected reflectance), NASA LANCE; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). NASA open data
- NASA Fire Information for Resource Management System (FIRMS), VIIRS 375 m active fire product, NASA LANCE; vector tiles via NASA GIBS. Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). NASA open data
- GHRSST Level 4 MUR analyses, NASA Jet Propulsion Laboratory; distributed by the NASA Physical Oceanography DAAC (PO.DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). NASA open data
- ASTER GDEM is a product of METI and NASA (ASTER Global Digital Elevation Model V003, NASA LP DAAC); imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). Cite as: NASA/METI/AIST/Japan Spacesystems and U.S./Japan ASTER Science Team (2019). ASTER Global Digital Elevation Model V003. doi:10.5067/ASTER/ASTGTM.003. NASA open data
- Made with Natural Earth. Free vector and raster map data @ naturalearthdata.com. Public domain
- © OpenStreetMap contributors (ODbL), via NASA GIBS (coastlines, boundaries, roads and place names). Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). ODbL
- Blue Marble, NASA Earth Observatory; imagery via NASA GIBS. Colours redrawn from the published colour map; values averaged into hexagonal cells where shown (modified). NASA open data
- Context on the globe and flat map: coastlines, boundaries, roads and place names from NASA GIBS reference layers (OpenStreetMap data, ODbL, © OpenStreetMap contributors); Blue Marble imagery as an optional base; 3D terrain and the elevation read-out from the ASTER GDEM elevation colour index (5 m to 200 m classes, exaggerated for legibility). Boundaries are drawn as published and imply no position on any territory.
- Live events: NASA Earth Observatory Natural Event Tracker (EONET); events are indicative and keep their original source links.
- Live: NASA EONET Events are indicative, not authority warnings.
- Live: U.S. Geological Survey Events are indicative, not authority warnings.
- Live: NOAA GOES-East ABI GeoColor (CIRA). We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS).
- NASA GIBS: We acknowledge the use of imagery provided by services from NASA's Global Imagery Browse Services (GIBS), part of NASA's Earth Science Data and Information System (ESDIS).
- Weather data by Open-Meteo.com (https://open-meteo.com/), licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/).
- Optional layers (7 sources in the layer list: live, forecast, observed and context) print their provider credit on the map and here when switched on; forecasts are model output and derived indices are estimates.
Layers and dates
- Night-time lights, daily: VIIRS Black Marble (VNP46A2), NASA LAADS DAAC · 12 Oct 2026
- Population density, 2020: Population: CIESIN, Columbia University, Gridded Population of the World v4.11 (2018), NASA SEDAC, CC BY 4.0 · static
- Flood water, 3-day composite: VIIRS Global Flood Product, NASA LANCE · 14 Oct 2026
- Active fires and thermal anomalies: VIIRS NOAA-20 375 m (FIRMS), NASA LANCE FIRMS · 13 Oct 2026
- Sea surface temperature anomaly: GHRSST MUR25, NASA JPL PO.DAAC · 12 Oct 2026
- True colour: VIIRS NOAA-20 corrected reflectance, NASA LANCE · 13 Oct 2026
What is measured, and how well.
Each indicator carries its unit, its cadence, the kind of source behind it and the evidence label a value would carry. No values are shown: a programme supplies them under its own authority.
| Indicator | Unit | Cadence | Source type | Label |
|---|---|---|---|---|
| Board-approved supply chain due diligence policy | yes or no, with scope | annual | Company governance and sustainability reports | DECLARED |
| Supplier tiers mapped and disclosed | number of tiers with published supplier lists | annual | Company disclosures | DECLARED |
| Grievance mechanism open to supply chain workers | yes or no; cases received and resolved | annual | Company reports and benchmark assessments | DECLARED |
| Human rights due diligence assessment | score by measurement theme | per assessment cycle | World Benchmarking Alliance assessments | ESTIMATED |
| Specific instances raised with National Contact Points | count by sector and issue | annual | OECD National Contact Point database | Published statistics |
| Import enforcement on forced labour grounds | count of detentions or bans by product | annual | Customs authority records | Published statistics |
| Beneficial ownership disclosed | share of supplier entities with known ultimate owners | annual | Beneficial ownership registers | Published statistics |
Deliberation and decision desk.
The screen a team would use to follow this subject: its measures, states and decisions. Names are examples and values are illustrative.
Deliberation and decision desk
Corporate governance and supply chains · Council A · Meeting 10
Agenda
| Risk appetite statement | P-892 | Approve | None | Discussing |
| New member admission | P-651 | Approve | Declared | Next |
| Safeguards annual review | P-524 | Note | None | Next |
| Data charter | P-668 | Consult | None | Done |
Anti-capture safeguards
in place, of 12
Decision record
- M-12DECAppetite statement approved with two dissents recorded
- M-15ACTSecretariat to publish reasons within 30 days
- M-16REVReview date set
Where the evidence comes from.
Named public datasets and institutional records, each with its licence class. Sources by agreement are used only under their terms and never republished.
| Source | What it gives | Licence class |
|---|---|---|
| OECD National Contact Point database of specific instances | Complaints under the OECD Guidelines for Multinational Enterprises and how they were handled | Free, attribution (OECD terms) |
| World Benchmarking Alliance Corporate Human Rights Benchmark | Assessments of company human rights policies, due diligence and remedy | Free, attribution and WBA terms |
| Business and Human Rights Resource Centre | Allegations, company responses and legal cases concerning business impacts on human rights | Free for non-commercial use, attribution |
| UK register of persons with significant control | Beneficial ownership of UK companies | Open Government Licence |
| Beneficial Ownership Data Standard publications | Ownership data published to a common standard by participating jurisdictions | Open licences per publisher |
| Company filings and statutory statements | Annual reports, modern slavery statements and sustainability reports required by law | Public records, terms per register |
Which sectors a disruption reaches, and for how long.
How far a disruption spreads through the economy and how much faster recovery shortens it, to set priorities for continuity and support measures. Teaching model with stated illustrative values, not a prediction. The map on this page shows Asia; the model itself is not tied to a place.
Controls
- Sector hit first (position in the list)
- 0
- Size of the shock
- 30% of its output
- Duration of the shock
- 30 days
- Recovery rate
- 0.08 per day
- Days simulated
- 180 days
Readouts
- Output lost over the run
- 0.90% of a year's output
- Total over direct (multiplier)
- 2.00 times
- Most affected other sector
- Transport and ports
- Its peak inoperability
- 3.2%
Numbers, methods and sources
| Sector | Peak inoperability (%) | Output weight (%) |
|---|---|---|
| Agriculture | 32.50 | 18.9 |
| Energy | 2.67 | 10.5 |
| Manufacturing | 1.95 | 22.4 |
| Transport and ports | 3.22 | 21.1 |
| Trade | 3.16 | 17.2 |
| Services | 1.06 | 9.9 |
Methods
- Input-output analysis Leontief (1936); Miller and Blair (2009), Input-Output Analysis, Cambridge University Press
- Inoperability input-output model Haimes and Jiang (2001), Journal of Infrastructure Systems 7
- Dynamic inoperability and recovery Lian and Haimes (2006), Systems Engineering 9
- Uncertainty fan (parameter Monte Carlo) Spiegelhalter, Pearson and Short (2011), Visualising uncertainty about the future, Science 333
- One-at-a-time sensitivity (tornado) Saltelli and others (2008), Global Sensitivity Analysis: The Primer, Wiley
Data
The model runs on the teaching values set by the controls. To calibrate it for a place, read it against these admitted layers and series, which this page's map can draw:
- Seaports Natural Earth
- Maritime chokepoints Nexus (named straits and canals at their published coordinates)
- Railways Natural Earth
- Major roads Natural Earth
Across the six pillars, led by Nexus Consortium
- Experiments Labs
- Built in Governance Nexus in Foundry
- Tested at Governance Nexus in Universe
- Codified in Foundations and Governance in Standards
- Published in Governance Nexus in Reports
- Taught in Faculty of Governance, Policy and International Affairs in Academy
Who decides, and what the evidence serves.
Governance Nexus prepares evidence. The decisions below are taken by the authorities named, under their own rules, and never by the platform.
| Who decides | The question | Evidence this page serves |
|---|---|---|
| Boards of directors | Whether due diligence is built into strategy, purchasing and remuneration, not only compliance | Due diligence process maps, decision-rights maps, comparable failures |
| Procurement and supply chain leadership | Which suppliers and tiers to map first, and which purchasing practices create risk | Risk-based prioritisation methods, sector risk evidence |
| Legislators and regulators | How mandatory due diligence and disclosure laws are scoped, supervised and enforced | Comparative laws, National Contact Point cases, enforcement records |
| Institutional investors | How to engage or vote on supply chain governance | Benchmark assessments, disclosed policies, grievance and remedy records |
Outputs this topic produces
- Due diligence process maps aligned with the OECD guidance and the UN Guiding Principles
- Case studies of supply chain failures and the governance questions they raised
- Decision-rights maps across boards, procurement, compliance and suppliers
- Comparative notes on mandatory due diligence laws and their supervision
From mandate to evaluation, by pillar.
The steps an instrument takes from mandate to evaluation, each with the pillar that runs it, and the decisions that stay with the authority. Teaching model with stated illustrative values, not a prediction. The map on this page shows Asia; the model itself is not tied to a place.
- Mandate and problem framing Competent authority (outside the programme)
A competent authority frames the problem and the mandate under its own rules. Howlett, Ramesh and Perl (2009) - Evidence and system model Foundry
The system is modelled with its feedbacks, data and stated limits. OECD (2014), principle 2 - Options appraised with scenarios Foundry
Instruments are compared under scenarios, with uncertainty shown. Hood (1983) - Exercise with stakeholders Universe
The options are tested in an exercise with those who would implement and bear them. OECD (2014), principle 3 - Standard or guidance drafted Nexus Standards
What works is codified as a standard or guidance, open to comment. Nexus Standards process - Decision by the authority Competent authority (outside the programme)
The authority decides, outside the programme, with the evidence on record. Howlett, Ramesh and Perl (2009) - Capacity and training Risk Academy
Those who implement are trained on the decided instrument and its data. Sendai Framework (2015), priority 2 - Monitoring and public report Reports
Indicators are published with sources, limits and corrections. OECD (2014), principle 5 - Evaluation and revision Nexus Standards
Results return to the standard and the model: the cycle closes. Howlett, Ramesh and Perl (2009)
Methods
- Policy cycle Howlett, Ramesh and Perl (2009), Studying Public Policy, Oxford University Press
- Governance of critical risks OECD (2014), Recommendation of the Council on the Governance of Critical Risks
- Layered drawing of directed graphs Sugiyama, Tagawa and Toda (1981), IEEE SMC 11
Across the six pillars, led by Nexus Consortium
- Experiments Labs
- Built in Governance Nexus in Foundry
- Tested at Governance Nexus in Universe
- Codified in Foundations and Governance in Standards
- Published in Governance Nexus in Reports
- Taught in Faculty of Governance, Policy and International Affairs in Academy
The questions experts ask.
- How far does a company's responsibility extend into its supply chain?
- How do firms identify and address human rights and environmental risks among suppliers?
- How concentrated are critical supply chains, and where are single points of failure?
- How do boards oversee supply-chain risk?
- How do disclosure and due diligence laws change corporate behaviour?
Exercise a cascade in corporate governance and supply chains with the people who decide.
Assembled from the Nexus Standards area profile Supply chain and trade risk: the hazards it names, the systems and communities that carry the loss, the controls and institutions that dampen it and the data that observe it. Pick an initiating event and step through the cascade to see where mandates meet and which decisions fall to whom. The Map view places the run on an example geography with open data. Every weight is a stated assumption. An exercise for dialogue, not a forecast, an assessment or a position. To model a place of your own choosing, open the full System Builder.
Hazards
- Dam failure
- River flood (set off downstream)
- Flash flood (set off downstream)
- Mass displacement (set off downstream)
- Widespread power outage (set off downstream)
- Water supply shortfall (set off downstream)
Systems and couplings
- Supply chain and trade risk
- Food security and nutrition risk Cascade
- Oceans and coasts risk standards Exposure
- Geopolitical and security risk Common driver
- Cyber and digital risk standards Cascade
Controls
NS-0Constitution and principlesNS-3Risk record UNIs (grammar, legacy crosswalk, allocation authority)NS-9Contextual UNIs (deployments, instances, programme instances)NS-10Policies and clauses (machine-readable obligations: definition, binding, evaluation and enforcement)NS-11Verification and monitoring (evidence, attestations, zero-trust conformance observation)NS-12Software, model and AI/ML artefacts (supply chain, model cards, dataset sheets)NRS-H60Hazard family: Supply-chain and flow disruption (NHS-1 sys.supply-chain)NRS-X4Trade, transport and supply chains riskNRS-H89Hazard family: Transport network disruption (NHS-1 infra.mobility)NRS-K38Domain pack profile: Supply chain trade (DOMAIN-038)NRS-H43Hazard family: Livestock and aquaculture epizootics (NHS-1 health.animal-health)NRS-M10Method fabric: Markets, trade and supply chains
Observation
- IMF PortWatch port activity and chokepoint disruptions (listed for reference)
- Global Supply Chain Pressure Index (listed for reference)
- OECD Data Explorer (SDMX API) (listed for reference)
- World Bank Open Data and World Development Indicators API (listed for reference)
- Developing countries' and least developed countries' share of global exports
- Passenger and freight volumes, by mode of transport
Example geography
- The Strait of Malacca: 227 hexagonal cells
- Night lights tonight, outages (VIIRS Day/Night Band), NASA GIBS
- Surface water through cloud, 30 m (OPERA DSWx-S1 radar), NASA GIBS
- Rain rate, last half hour (IMERG), NASA GIBS
- Surface soil moisture (SMAP), NASA GIBS
Due diligence and resilience.
Human rights and environmental due diligence, as set out in international guidance such as the UN Guiding Principles on Business and Human Rights and the OECD due diligence guidance, asks firms to identify, prevent, mitigate and account for adverse impacts in their operations and value chains. A growing number of jurisdictions have made elements of due diligence mandatory. Practice varies widely, from audit-based approaches that check suppliers against codes to deeper engagement on purchasing practices that drive abuses.
Resilience is a related but distinct concern. Lean, concentrated supply chains reduce cost but increase vulnerability to disruption, as events affecting key producing regions have repeatedly shown. Visibility beyond direct suppliers is often limited, so firms may not know where critical inputs originate. Governance must balance efficiency, resilience and responsibility.
Boards increasingly treat supply-chain risk as strategic, but oversight depends on information that management often lacks below the first tier.
Purchasing practices are a governance lever that is often overlooked. Short lead times, last-minute order changes and price pressure can push suppliers to excessive overtime or subcontracting, so governance that looks only at supplier compliance, and not at the buyer's own conduct, can miss the root cause.
Why now: due diligence duties on supply chains are being adopted in several jurisdictions, and responsible business conduct guidance was updated by the OECD in 2023. Governance Nexus compares how companies and regulators govern supply-chain risk and convenes them under precompetitive rules.
How corporate governance and supply chains is governed: instruments, mandates and commitments.
The instruments, mandates, actors and accountability arrangements a policymaker, diplomat or development agency works with, citing the agreements that set them. Structures follow the frameworks named. Any state or progress drawn is illustrative, not a record.
Policy instrument matrix
The kinds of instrument available on corporate governance and supply chains, by level of government and cooperation.
| Instrument type | Local | National | Regional | Global |
|---|---|---|---|---|
| Regulatory | Zoning, building codes | Laws, standards, licensing | Harmonised rules | Conventions and treaties |
| Economic | Local levies, grants | Budget lines, taxes, insurance schemes | Risk pools, regional funds | Financing mechanisms |
| Information | Local warnings | Disclosure, early warning, statistics | Data sharing arrangements | Global monitoring and reporting |
| Institutional | Local committees | Lead agencies, coordination councils | Regional bodies and secretariats | Multilateral mandates |
| Cooperative | Community agreements | Partnership compacts | Memoranda and joint programmes | Agreements and joint commitments |
Methods and their limits.
Supply-chain mapping
Tracing suppliers and origins; visibility declines with each tier.
Risk and impact assessment
Assessing human rights and environmental risks by country, sector and supplier.
Effectiveness studies
Studying whether audits and due diligence change outcomes; evidence is mixed.
Limits: audits can miss abuses, supplier data are often self-reported, and effects of due diligence laws are still being studied.
How it is studied, and what the methods cannot say.
- 01Systems engineeringDecision-rights and interface mapping · Assurance and control designApplied here
- 02Decision analysis under uncertaintyRisk appetite and tolerance setting · Multi-criteria appraisal of institutional optionsApplied here
- 03Policy, institutional and decision scienceInstitutional role mapping · Comparative governance case studiesApplied here
Questions and answers.
What is risk-based due diligence?
Is a supplier audit the same as due diligence?
Who is responsible for impacts at a distant supplier?
Does Governance Nexus audit supply chains?
Is due diligence mandatory?
Does this cover small firms?
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