The value of a third-party risk management strategy
Traditional brick and mortar business is a thing of the past: physical buildings and conventional employees no longer define your organization. The modern organization is the extended enterprise: an interconnected maze of relationships and interactions that span traditional business boundaries. These relationships go beyond traditional employees to include suppliers, vendors, outsourcers, service providers, contractors, subcontractors, consultants, temporary workers, agents, brokers, intermediaries, and more. Complexity grows as these interconnected relationships, processes, and systems nest themselves in intricacies, such as deep supply chains and subcontracting relationships.
The challenge today is that issues of integrity in your extended business relationships are your organization’s issues. You stand in the shoes of your third-party relationships. Third-party integrity problems are the organization’s integrity problems and directly impact the brand, as well as reputation while increasing exposure to risk and compliance matters. Compliance and ethics challenges do not stop at organizational boundaries.
An organization can face reputation and economic disaster by establishing or maintaining the wrong third-party relationships, or by allowing good business relationships to sour because of weak governance of the relationship. When questions of business practice, ethics, safety, quality, human rights, corruption, security, and the environment arise, the organization is held accountable, and it must ensure that third-party partners behave appropriately.
Third party risk management challenges
Maintaining integrity across the extended enterprise is challenging, as your organization faces . . .
[THE REST OF THIS ARTICLE CAN BE FOUND ON THE CONVERCENT BLOG WHERE GRC 20/20’S MICHAEL RASMUSSEN IS A GUEST AUTHOR]