At iPRO, we're passionate about educating our clients on the fundamentals of successful third party risk management. The art of considering every risk posed by businesses operating at arm’s reach of your organisation (vendors, suppliers, service providers and contractors), third party risk management not only keeps your organisation out of trouble, it heightens the need for a system to manage these important relationships.
Drawing expertise from a wide variety of backgrounds, here at iPRO, we’ve observed five steps that are key to all successful third party risk management programs – a system of 5 steps you can follow to avoid financial, reputation and business hardships:
- Ownership within an organisation ensures there is accountability at management level and responsibility at the front line.
- Standards establish that a set of rules must be met by third parties to ensure they are compliant and meet your organisational expectations.
- Technology incorporation ensures the performance and efficiency of your organisation’s compliance management program.
- Reporting identifies risks and the performance of third party suppliers, vendors and contractors against the standards set by your organisation.
- Governance and oversight of your organisation’s risk management program by the board of directors ensures its effectiveness and promotes a positive risk culture "from the top".
Whoever oversees your organisation’s risk management, they will also need a direct line to the top tier of the organisation – ideally, in the form of a designated executive or board member. This is so important that it has become a requirement in international risk management standards.
A direct line to the top tier of an organisation keeps the high-level risk management program visible, with access to resources and decision makers, and also helps communicate the importance of the risk management system to front-line staff – often the ones who are making the risk decisions.
iPRO works with clients to significantly reduce third party risk and management costs by assisting organisations to achieve best practice in third party compliance.