Third Party Risk Management Definition

Third party risk management is the process of identifying, assessing, and mitigating risks that may arise from interactions with external parties. This includes contractors, vendors, suppliers, and any other organization or individual that provides goods or services to your company.

The goal of third party risk management is to protect your company’s assets and reputation while ensuring that you can still take advantage of the opportunities that working with outside parties can offer. An effective third party risk management program will consider the full lifecycle of a relationship with a third party, from initial engagement through contract termination.