FREE DOWNLOADABLE WHITE PAPER: Really getting to know your third parties: protecting your business reputation in an increasingly complex world of corporate compliance
Produced with contributions from compliance specialists on both sides of the Atlantic, this white paper looks at how you can protect your business reputation in an increasingly complex world of third-party corporate compliance.
“Third party” has a variety of narrow definitions in business and law, some implying a layer of separation between two parties. But in the expanding world of company due diligence, the term has become much broader, extending to any person or entity outside your organisation you have any sort of contractual relationship with; and it implies the opposite: inextricable closeness that could come under scrutiny either by regulators or the public – whether the press, social media or your potential market.
Trade is no longer purely transactional, and you need to have a full picture of your third parties – whether they’re customers, suppliers, agents, distributors or joint-venture business partners. A major challenge is establishing who ultimately owns and controls these third parties; individuals and companies on sanction lists can be obscured behind complex ownership structures. And a lack of transparency would not protect your reputation.
Addressing this central issue in detail – exploring direct, indirect and circular ownership – the white paper also considers: examples from global media of corporations falling short of their responsibilities; gathering corporate ownership data; and technology that has emerged to address your business challenges.
The other key theme is plugging your third-party knowledge gaps, focusing on such areas as: decisions about “perceived risk” and “unknown risk”; poor “core” data on business partners; and flawed questionnaires for entity data collection.
With OFAC and its European equivalents wielding ever greater regulatory influence over the banking sector and contributing to a global climate of heightened compliance, corporations are feeling this trickle-down effect in their reputation risk management.
After all, as Ted Datta, director of governance, risk and compliance at Bureau van Dijk says: “Businesses can no longer turn a blind eye when inadvertently and indirectly ‘buying diamonds from warlords.”
This is an extreme example but the principle can be applied to numerous scenarios that businesses should be aware of.
Putting systems in place to assess your third parties is the best way to address these risks and this white paper shows you how.