Supplier relationships are no longer just about managing transactions. Today, organisations are working with suppliers in more strategic and collaborative ways. As those relationships become more complex, the need for clear structure and accountability grows. That is where a supplier governance framework comes in.

A supplier governance framework provides clarity on how you manage supplier relationships, track performance, escalate issues, and create long-term value. In this guide, we explain how to write one that is both practical and effective.

What Is a Supplier Governance Framework?

A supplier governance framework is a set of processes, roles, and responsibilities that guide how your organisation engages with suppliers. It outlines how decisions are made, how risks are managed, how performance is monitored, and how you work with suppliers to unlock value.

A strong framework should:

• Bring consistency to how suppliers are managed

• Clarify responsibilities and escalation paths

• Support risk mitigation and compliance

• Enable joint problem-solving and innovation

Don't take my word for it, experts that were asked to contribute on LinkedIn said this.

Step-by-Step Guide to Building a Supplier Governance Framework

1. Define the Purpose and Scope

Start by clarifying the goal of your framework. Is it designed for all suppliers or only strategic and critical ones? Are you focusing on performance, risk, innovation, or all of these areas?

Segment your supplier base so that the governance model is proportionate. Strategic suppliers might need quarterly executive reviews, while operational suppliers might only need monthly performance check-ins.

2. Set Governance Principles

Your framework should be grounded in clear principles that guide behaviours and decisions. These might include:

• Transparency and accountability

• Mutual value creation

• Risk-based decision-making

• Continuous improvement

These principles will shape how both sides engage and resolve issues.

3. Create a Tiered Governance Structure

Different suppliers require different levels of oversight.

Most frameworks include three levels:

Executive or Strategic Governance

Focuses on long-term direction, strategic alignment, and joint planning. Typically involves senior leaders and occurs quarterly or biannually.

Operational Governance

Covers performance reviews, risk monitoring, and contract compliance. Often led by category managers or contract owners and occurs monthly or quarterly.

Tactical or Working-Level Governance

Deals with day-to-day delivery, issue resolution, and continuous improvement. Usually held weekly or monthly with operational teams on both sides.

Each level should have a clear agenda, purpose, and process for escalating issues to the next level when needed.

4. Define Roles and Responsibilities

Clarity of ownership is essential. Identify internal and supplier-side roles such as:

• Relationship or contract owner

• Governance lead

• Risk and compliance lead

• Executive sponsor

Use a RACI model (Responsible, Accountable, Consulted, Informed) to map out who does what. This avoids confusion and supports consistent execution.

5. Agree on KPIs and Performance Metrics

Choose the right metrics for the type of relationship. These could include:

• Operational metrics like delivery rates, quality, and lead times

• Strategic metrics like innovation outcomes, sustainability performance, and cost efficiency

• Relationship measures such as collaboration, responsiveness, and trust

Use scorecards or dashboards to track performance and identify trends over time.

6. Design Effective Meetings and Reviews

Governance should not be a box-ticking exercise. Make meetings purposeful by:

• Using standardised templates or agendas

• Focusing on insights and decisions rather than data overload

• Tracking actions and following up regularly

• Including both retrospective and forward-looking discussions

Ensure that both sides come prepared and that there is a clear record of decisions and agreed actions.

7. Define Risk and Issue Management Processes

Your framework should include clear protocols for identifying, escalating, and resolving issues. This might include:

• How and when risks are reported

• Thresholds for different levels of escalation

• Responsibilities for mitigation and response

• Integration with your wider enterprise risk management processes

Make sure the process is known to both internal teams and suppliers.

8. Support Continuous Improvement and Innovation

Governance is not just about compliance. It should also create space for ideas and improvement. Include activities such as:

• Joint improvement planning

• Lessons learned sessions

• Innovation workshops or pilots

• Feedback from both sides, including Voice of the Supplier surveys

This ensures the relationship evolves and stays relevant over time.

9. Document It in a Governance Toolkit or Playbook

Bring everything together in a structured and user-friendly format. Your governance framework should include:

• An overview of the model and tiering

• Meeting calendars and agendas

• Contact lists and role definitions

• Templates for scorecards, action trackers, and meeting notes

• Risk and issue escalation matrices

This helps embed the framework and ensures a consistent experience across all supplier relationships.

Final Thoughts

A supplier governance framework is a strategic tool for "managing risk, change control and dispute management" - (https://www.gov.uk/government/publications/contract-and-supplier-management)

However, we can go beyond this Government guidance, managing supplier performance, enabling collaboration, and reducing risk. When well-designed, it creates a shared understanding of how the relationship is managed and how value is created.

It is not about adding bureaucracy. It is about giving your teams and suppliers a clear roadmap for working together effectively. Whether you are starting from scratch or refreshing an outdated model, focus on simplicity, consistency, and outcomes.

If you would like help turning this guidance into a practical toolkit or workshop for your team, let us know. We are here to support your supplier relationship journey.

If you need a Supplier Governance Model or Framework, contact SRM Tribe. We specialise in helping organisations design practical, scalable governance structures that drive performance, reduce risk, and strengthen supplier collaboration. Whether you're building from the ground up or refreshing an existing approach, we’ll work with you to create a model that fits your supplier landscape, aligns with your strategic goals, and delivers real-world results.