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COUNCILMEETING
2014
Third Party Risk in a Global Environment:
NAVEX Global Survey Findings, Best Practices and
ChallengesPractical Strategies for Success
Today’s Presenters:
Nick CiancioSenior Vice President, Strategic SolutionsNAVEX Global
Randy StephensVice President, Advisory ServicesNAVEX Global
NAVEX Global Survey Findings
The following results are taken from an independent study of over 300 business professionals regarding third parties:
of respondents indicated they would increase the use of third parties in the coming 12 months or weren’t sure.92% don’t conduct any due diligence before contract negotiations begin and most companies do not conduct due diligence on third parties before onboarding them
80% conduct due diligence after contract signing
50%
Survey Findings ( cont.)
Many organizations are limiting their compliance tracking to corruption and legal issues only
40% do not feel their organizations are well prepared to reduce ethics and compliance issues associated with their third parties
50% do not feel their organizations are prepared to meet new supply chain and distribution disclosure requirements
agree that ethics and compliance performance of third parties is a growing concern
85% Survey Findings ( cont.)
38%60%
of respondents have confronted issues of ethics and compliance with third parties in last 12 months
agree third party ethics and compliance risks are the most important to mitigate
38% believe they monitor fewer of their third parties than they should
4% had fully automated third party risk management
Survey Findings ( cont.)
Third party budgets were estimated to increase by 6% over
the following 12 month period.
70%73%
52%
believe more sufficient monitoring is necessary beyond an initial screen
require ethics and compliance training for third parties
require code of conduct attestation
Third Party Risk Management CHALLENGES & BEST PRACTICES
Challenge Best Practice
Disparate internal functions managing their third parties
independently
Collaboration across the enterprise
NAVEX Global Advisory Council 2014
The Third Party Risk Management ProcessCOLLABORATION ACROSS THE ENTERPRISE
Create Third Party Policies Collaboratively
Access Third Party Policies by Type
Review Third Party Policies
Challenge Best Practice
Disparate internal functions managing their third parties
independently
Business justification—cost control/spend justified
Third Party Risk Management CHALLENGES & BEST PRACTICES
Provide proposed third party details and justification
Automate Business Justification process with NAVEX Global Report Forms
All review data stored within case record
The Third Party Risk Management ProcessBUSINESS JUSTIFICATION
Challenge Best Practice
Third parties not fully catalogued Identifying universe of third parties
Limited due diligence on select third parties
Proportional risk management across entire universe of third
parties
No ongoing monitoring Ongoing automated monitoring
Third Party Risk Management CHALLENGES & BEST PRACTICES
Client Admin/User Portal
The Third Party Risk Management ProcessDUE DILIGENCE AND MONITORING
Third Party Risk Management Portal for Questionnaires and Document Upload
Challenge Best Practice
No mitigating actions for third parties at risk
Align remediation with risk
Third party risk mitigation strategy connected with actual business
practices and processes
Third Party Risk Management CHALLENGES & BEST PRACTICES
Choose Due Diligence Report Level Template
All Case Activity
The Third Party Risk Management ProcessRemediation
Challenge Best Practice
No legally defensible record of third party knowledge of company
policies/procedures
Create a record of policy attestation and provide training where possible
Third Party Risk Management CHALLENGES & BEST PRACTICES
Add a Certification to each policy
Add a Quiz/Survey to each Policy, to gauge understanding and gather data
Embed Burst Learning to provide topically relevant instruction
The Third Party Risk Management ProcessAWARENESS AND COMMUNICATION
Thank you
