Mitigating Third Party Risk

Posted: December 6th, 2015

By Pamela Passman

Pamela Passman is President and CEO of the Center for Responsible Enterprise and Trade (CREATe.org), a global nongovernmental organization dedicated to helping companies and their third parties implement leading practices to prevent corruption and protect intellectual property. Prior to founding CREATe, she was the Corporate Vice President and Deputy General Counsel, Global Corporate and Regulatory Affairs, Microsoft Corporation.

Over the past several decades, quality, health and safety, and environmental issues have topped the list of supply chain concerns. However, increasingly two issues are rising to the fore of the agenda for multinationals working with third parties across the globe. According to the PwC 2015 State of Compliance Survey, data security topped the list of compliance-related risks in the coming five years, with bribery and corruption not far behind.

Information breaches and corruption by third parties can make companies vulnerable to reputational, legal, and financial harm. Suppliers with access to corporate networks and valuable trade secrets can be the “weak link” for threat actors to gain access to company assets. Sales agents, customs brokers, distributors, and other business partners pose corruption risks as well.

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