Third Party Governance & Risk Management has been saved
Third Party Governance & Risk Management
Turning risk into opportunity
For many organisations in recent years, third party ecosystems have become vital sources of strategic or competitive advantage. As reliance on third parties continues to grow however, so do the number of headline stories depicting reputational damage or regulatory action as a direct result of third party actions.
Organisations are now having to reconsider how they approach the management and governance of third party risks. Here, we present our initial findings and tools to support the management of this essential yet complex topic.
In our first paper we present our global findings on this important topic. We also offer tools and frameworks that will enable you to assess your organisational maturity and determine a clear way forward.
Our findings indicate that the failure by large multinational businesses to appropriately identify and manage third parties can lead to fines and direct compensation costs in the region of US$2-50m, while action under global legislation can be far higher, touching US$0.5-1bn.
The Opportunity in Risk
Deloitte believes organisations that have a good handle on their third party business partners can not only avoid potential costs and reputational damage, but stand to gain competitive advantage over their peers, out performing them by an additional 4-5% ROE. Our research indicates that effectively governed third party relationships can be a significant source of organisational value.
Our full report details academic findings, industry examples and includes step-by-step guides for global organisations to under undergo value-focused transformations which adopt best-in-class practices to leverage the extended enterprise as a source of opportunity, whilst mitigating the associated risks.