Businesses always have to be ready to mitigate the risks of unexpected behaviour from external parties.
Most companies depend on a multitude of other entities for their business to function – including vendors, manufacturers, suppliers, agents, distributors, franchisees, and more.
Unfortunately, increased reliance on outside parties multiplies the challenges involved in building processes to effectively manage and mitigate the potential risks in these relationships.
These risks include customers holding your company accountable for the actions of your partners, which could have dire consequences for your business.
For example, your company could experience backlash from a third party’s inferior-quality service, supply chain issues as a result of poor contingency planning, or data breaches resulting from inadequate security practices.
One example of this is the recent data breach at a large credit services provider, which allegedly exposed the personal information of millions of South African banking customers.
This event has sent banks into damage control, with customers confused and paranoid over whether they needed to change passwords to protect their accounts.
Events like these could result in regulatory and legal violations, reputational damage, and financial volatility.
Preparing for the unexpected
The onus is on your business to be in the best possible position to survive the disruptions which manifest from third-party risks.
While unfavourable outcomes cannot be predicted with complete certainty, businesses should be proactive in mitigating the possible risks these parties pose.
However, the mitigating steps themselves should be subject to scrutiny, as in some circumstances it is the consequence of a consequence that bears a more significant impact than what was preceded.
Whether it is the assessment of a risk or dissemination of a policy, there may be positive or negative knock-on effects that fall outside the ambit of intent.
How you prepare for such consequences will determine their impact on your organisation’s objectives.
CURA Enterprise Risk Management solutions
CURA’s Enterprise and Operational Risk Management software solutions enable organisations to effectively and efficiently manage the risk of loss resulting from
human error factors and external events.
With CURA, organisations can create an automated, repeatable process that includes risk assessment and analysis, as well as the implementation of risk controls.
As a result, businesses are better prepared to accept, mitigate, and avoid risk in their operations – even those that could arise from unintended consequences.
These solutions are available as standalone applications or add-on modules to a more comprehensive implementation based on the CURA Enterprise GRC Platform.
With integrated reporting and dashboards, full audit support, and more, the CURA Enterprise GRC Platform is the complete solution for governance, risk and compliance requirements.
This article was published in partnership with CURA Software.