Third Party Risk Management: A Perspective

Abstract

Engagement of third-party agencies as a business strategy is all pervasive in the present days of fast technological changes/innovations and spree for digitisation of business. Incidence of disruption to supply chains and other third-party arrangements has been seen occurring more frequently in recent years than before. Such disruptions have far-reaching macro-economic and risk management implications .The ripple effects of supply chain disruptions can adversely impact the sales and profits, impair brand values, reduce customer satisfaction and may cause risky compliance breaches and reputational damages. Although organisations generally could tide over the adverse effects of recent shocks, there is no room for complacency about this growing problem. In his backdrop third-party risk management assumes critical importance. This article attempts to delve into the various facets of third-party risk management needing attention of the top management and the board of directors.