4 Lucky Leaves in Your Third-Party Risk Management Clover

There’s really no such thing as too much luck in the third-party risk management industry. Like any other profession, talent, hard work and a little bit of something special may help you make your vendor management program shine. It’s one thing to know you’re getting the job done and meeting requirements, but frankly, there are a few things that only the most charmed third-party risk management professionals have in their corner.

4 Things a Risk Management Professional Is Lucky to Have

As many well know, vendor risk management is not for the faint of heart and it’s certainly not a one-person job. It takes a lot of work to develop a truly effective, well-oiled program. It seems to be that across industries, we all need to meet similar requirements regardless of the resources we’re provided. Therefore, finding all four of these “lucky” things within a vendor management program is sort of like trying to find a four-leaf clover: elusive, challenging, but oh-so-rewarding!

The following items are a part of the luckiest third-party risk management programs:

1. Top-Down Support. 

The tone-from-the-top is an incredibly important component of a successful third-party risk management program. When the organization’s culture is either uninterested in dedicating resources towards mitigating risk, or simply just doesn’t consider it a priority, it can make the already challenging mission of defending against vendor risk a very cumbersome task for all involved. Having a supportive and understanding culture is truly a game changer for accomplishing risk management tasks.

2. A Software Platform.

The manual approach to third-party risk management is an administrative nightmare. The ever-multiplying number of documents alone that need to be tracked, monitored and maintained is a disaster waiting to happen. Not to mention, the various data points that need to be tracked and maintained on each and every vendor. It helps to establish the level of consistency needed to meet regulatory expectations. It can also be a due diligence superpower, helping your program stay on top of due dates and keep track of important vendor documents.

3. Sufficient Personnel.

As we mentioned above, third-party risk management should not lie on the shoulders of a single person. Having the appropriate number of resources for your organization’s size and vendor population is critical to a program’s success. There’s a lot of work that goes into keeping the third-party risk management lifecycle running smoothly. Many times, third-party risk responsibilities are lumped on top of existing responsibilities, creating an impossible circumstance. A well-run third-party risk management program invests in the resources get the job done right, without creating unrealistic expectations for their people (e.g., tools, software and the necessary amount of people). 

4. Supportive Contracts.

All too often, contracts are signed without holding vendors accountable for the associated risks and due diligence efforts. Without well-managed contract terms, third-party risk management professionals often find themselves between a rock and hard place when requesting due diligence documents, among other things. An organization that embraces the importance of third-party risk management includes baking essential terms right into contract templates, like solid right to audit requirements. Not to mention, properly overseeing contract management is a key part of the vendor management lifecycle and a viable vendor risk initiative.

Third-party risk management is a tough gig, but someone has to do it. Unfortunately, sometimes getting the job done feels a little like swimming under a boat trying to patch holes while pushing it up stream. However, you might end up stumbling upon a little luck, in a supportive organization, with a sufficient team, good technology and contractual support. And, here’s to finding that third-party risk management four-leaf clover. 

How does your vendor management program compare to your peers and the rest of the industry? Download the whitepaper to find out.