Effective third party management is critical to reducing risk and ensuring compliance. There are 3 key steps to effective management. Many companies have found that a weak third party management program has caused them a great deal of grief that includes:
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Penalties and fines
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Other sanctions
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Reduction in the public’s confidence
Managing vendors, reducing risk and ensuring compliance is a very important part of successful regulatory compliance. The bottom line is, your organization will ultimately be held responsible for the actions of parties in your chain that are not compliant. Whether third party groups can impact your organization through regulatory compliance or soil your groups hard earned reputation the affects will be measurable. The right management processes and policies have to be in place.
The Steps
There is one step that is crucial to the success of the other steps! The first step is to ensure the proper training of the team that will be responsible for the management of the third party . Here are the steps:
Step 1- Training
There is no better way to ensure than the management team is all on the same page than to ensure everyone has the same training opportunities. A well-trained management team ensures that nothing is missed.
Step 2- Clear Policies
Having clear policies outlined, sharing those policies with third parties, and outlining clear sanctions define expectations. Detailing standardized expectations can improve compliance and make managing third parties easier.
Step 3- Zero Tolerance
Key management personnel should adopt a “zero tolerance” approach for non-compliance to the outlined policies. It should be a part of corporate policy and mandatory. The sanctions that are outlined in the management policies should not be negotiable. A hard line when it comes to 3rd party compliance can save a lot of grief down the road for your organization.
Compliance Education Institute can help with the first step, the most critical step, by providing the training.
