Third Party Risk
I recently received a question about 3rd party risk and vendor risk. Many of you work for large corporations doing business in many different countries with different cultures and laws. There are a lot of issues with vetting vendors so that they are passing the cultural tests and ethics tests. How do we know that each vendor’s actions will be in line with what you’re asking them to do, that they won’t cut corners or do something that’s wrong.
If you as a leader have instituted core values in your organization that align with the core values of your corporate culture, that will begin to flow because you as a leader will be living, acting, breathing those values. Whether you’re sitting in Ohio with operations in Turkey, the vendor that you’re working with in Turkey will be in conversation with someone on your team in Turkey that will also be living the same values you are. If that’s happening, then the vendor should also fit that mold of being ethical, holding true to your company’s values. You should still hire a 3rd party risk assessment company to vet vendors.
At the end of the day, who your vendors work with is out of your control. The most you can do is vet them, do an assessment, make sure your values are instilled in your relationship, provide incentives for integrity, but also penalties for not doing so.
In conclusion, hire a good 3rd party person or company to do a risk assessment, install what your core values are ongoing, not just once in a while. Make it clear that shortcuts and unethical behavior is not tolerated in your company.