The Current Business Climate Requires a Review and Reassessment of Your Organisation’s Third-Party Relationships.We won’t soon forget the year 2020 and the myriad ways worldwide business was derailed over a microscopic virus that caused a global pandemic. From layoffs and shutdowns to shortages and closures, the long-term effects of the pandemic have yet to be determined. But one thing is certain: The disruption to the global supply chain has wreaked havoc in virtually every business sector. third party risk management
Automobile manufacturing in Korea has been suspended due to a lack of parts from China. The fashion industry in the United States is struggling over sourcing as garment producers in Asia reduce output. U.K. aerospace manufacturer Rolls-Royce has announced it is cutting 9,000 jobs as a result of the coronavirus. And sharp declines in consumer demand have adversely affected global manufacturers who in turn are idling production to curb losses.
> Learn more! Find out how anti-bribery and anti-corruption management plays an important part in your third-party risk management strategy. This FREE ebook analyses the performance of Rolls-Royce in terms of ABAC policies within the scope of the ISO 37001 provisions.
Global sourcing has been greatly impacted as suppliers have ceased operations, and multinational organisations have had to scramble to locate replacement supply sources. This gloomy picture has been made all the more daunting as opportunists, bad actors and other sanctioned, restricted or unreputable parties have set up operations to take advantage of unsuspecting and desperate businesses by producing inferior goods, missing contractual deadlines, or operating in ways that could raise flags in the areas of ethical conduct, business integrity or jurisdictional compliance. As such, multinational companies need to be on high alert for such nefarious outside operations, lest they put their reputations, stakeholders, directors and bottom lines at risk.
Now is the time to identify alternative supply scenarios and re-evaluate contractual terms and performance metrics with those parties in the sourcing network. And to accomplish this, a risk-based approach to diligence, screening and vetting present and potential third-party suppliers is more important now than ever before.
Risk Management and Anti-bribery Anti-corruption Playbook
Get your guide for risk prevention, detection and compliance
Risk management is a full-time, ongoing endeavour for organisations in today’s business world, and it poses constant challenges. The first part of reducing risk is having a strategy, and taking action. We developed this Playbook to help you do exactly that.
What are the risks?
Threats are increasing on several levels for organisations that rely on outside third parties, such as agents, brokers, vendors and suppliers. While depleted inventories, idle production, inferior products and delayed delivery have greatly impacted the marketplace worldwide, multinational businesses are feeling the brunt of these pandemic-induced supply chain disruptions on a greater scale:
- Organisations are suffering financial loss as the supply chain falters;
- Companies are losing customers because of poor-quality products and services from third parties;
- Organisations are opening the doors to litigation by working with third parties that may be engaging in bad labour practices or forcing workers to produce in unsafe work conditions;
- Company data systems are being exposed and breached because of poor security practices by third parties;
- Companies are experiencing a greater level of supply chain issues due to poor disaster recovery procedures enacted by third-parties;
- Organisations and boards are increasingly being exposed to litigation because of relationships with outside providers that may have violated contractual terms, potentially resulting in regulatory exposure;
- Such organisations are being targeted by story-hungry media sources determined to expose the company to a global audience.
The result of these increased risks can be highly problematic:
- Business litigation has skyrocketed;
- Corporate reputations are negatively impacted on a larger scale;
- Organisations have had to continually review, reassess and adapt risk management frameworks to adjust and acclimate to an ever-changing global business environment;
- Board members are becoming increasingly subjected to intense scrutiny from outside watchdogs and critics;
- Unfortunately, a highly educated market responds to the above scenarios accordingly with their pocketbooks.
From supply and production disruptions to regional compliance issues and bad media exposure, multinational corporations are facing increased scrutiny working with unscrupulous third-party partners. Thus, the intense need to remain vigilant in conducting due diligence and vetting those outside affiliations.
Explore third-party risk management in depth
Manage third-party risks with confidence
Is COVID-19 testing the effectiveness of your business continuity plans and crisis management response plans? We understand that your third parties introduce a host of risks, including cyber, privacy, digital, brand and regulatory. CRI Group can help you during this pandemic and strengthening your THIRD-PARTY RISK MANAGEMENT programs or functions, assess third parties’ controls, and managing risks – more than ever is important to act now, to future-proof your business.
Don’t let the dominoes fall, ever, with our 3PRM certification…
CRI Group’s third-party compliance verification and certification program – 3PRM-Certified™ – can help organisations establishing the legal compliance, financial viability, and integrity levels of outside partners, suppliers and customers seeking to affiliate with your business. Third-party relationships are critical in business today, and include partnerships with suppliers, distributors, consultants, agents and other contractors. While such affiliations are essential to the success of your organisation, the consequences of inadequate due diligence cannot be overestimated. As the risk for data breaches and supply chain disruption continues to rise with COVID-19, so does the need for an effective third-party risk management (TPRM) programs. Whether you’re a TPRM professional looking for a certification to advance your skillset, or the leader of your organisation considering how to better equip your team with the best knowledge and skills, 3PRM-Certified™ program is a all in solution.
CRI Group’s exclusive 3PRM-Certified™ solution provides the very best in third-party risk management. Our 3PRM-Certified™ program provides a proactive approach to mitigating risks from third-party affiliations, protecting the organisation from liability, brand damage and harm to business. The 3PRM-Certified™ program includes a focus on the following:
- Providing third-party risk assessments
- Meeting contracting requirements
- Conducting due diligence
- Identifying potential fraud risks
- Providing management oversight
Utilising a network of trained professionals positioned across five continents, CRI Group’s 3PRM services utilise one of the largest multi-national fraud investigation teams the industry has to offer. The 3PRM-Certified™ program is especially critical when your business is performing pre-merger and acquisition research and pre-IPO due diligence, engages new clients, employs, contracts or retains foreign business partners and requires a consistent and audit-worthy AML and anti-corruption compliance program.
> Learn more about TRM with our 3PRM-Certified™ brochure!