White Paper:

Specter of Third Party Risk

It is not uncommon in today’s global business world for companies to maintain myriad third-party relationships in an effort to reduce costs, increase efficiency and focus more intently on core competencies. However, while businesses seek to gain a competitive and operational advantage through these relationships, they are also exposing themselves to an increasing level of risk. At the same time, however, it is becoming increasingly difficult for businesses to maintain the necessary controls for mitigating the risks associated with these relationships.

Based on recent events involving certain multinational companies, it’s quite apparent that shortsighted efforts with respect to addressing and controlling the risks associated with third-party relationships can have negative implications on operations, finances, and reputation. Yet attempting to address every single risk facing a company, however, can be a daunting effort.

Furthermore, while many companies feel they maintain the adequate means for mitigating their internal and external risks, a gap still oftentimes remains between perceived risks and actual risks. It is therefore necessary to establish a comprehensive third-party risk management strategy to augment existing risk management best practices and ensure the risks posed by a company’s vast network of vendors, suppliers and agents will not inhibit the ability to remain focused and competitive.