_{PART FOUR}
BUILDING A BEST-IN-CLASS TPRM PROGRAM

in partnership with GAN Integrity

BUILDING A BEST-IN-CLASS TPRM PROGRAM

Governance & Ownership

Governance and policy form the bedrock of an effective TPRM program. They define the organization’s risk appetite, set accountability, and guide all external engagements.

By establishing documented policies and clear oversight structures, businesses ensure consistent standards, transparent decision-making, and cohesive conflict resolution methods.

Regular policy reviews allow for adaptation to changing regulations and technologies, minimizing non-compliance risks.

Strong governance aligns TPRM with enterprise objectives, embedding a proactive risk culture across departments. Ultimately, well-defined governance streamlines processes, fosters accountability, and sets the tone for the entire TPRM lifecycle.

Among the 2025 World's Most Ethical Companies honorees:

_90%

have a significant role in the end-to-end third-party risk management process.

_95%

maintain a documented policy for vendor management.

_15%

incorporate AI-specific clauses, such as a Use of Ai provision in their third-party code.

How AI May Help

Automated Policy Management: AI tools can monitor regulatory changes, compare them to existing policies, and suggest updates, streamlining compliance and reducing manual effort.

AI Governance Consideration

Ensure your TPRM policies require third parties to disclose if their products or services use AI, specify related controls, and provide evidence of their AI governance practices to maintain accountability and compliance.

BUILDING A BEST-IN-CLASS TPRM PROGRAM

Cross-Functional Collaboration

Effective TPRM requires breaking down silos between compliance, procurement, legal, risk, cybersecurity, and business units.

A centralized governance framework defines roles- for example, procurement owns vendor onboarding, compliance conducts due diligence, and IT assesses cyber risks.

Collaboration tools (e.g., shared dashboards) ensure visibility into vendor risks across teams. Accountability is enforced through clear escalation paths; for instance, high-risk vendors may require C-suite approval.

Training programs educate employees on red flags (e.g., suspicious invoicing) and reporting mechanisms.

How Technology May Help

Centralized Risk Intelligence: Dashboards aggregate inputs from procurement, compliance, and IT to create a unified risk view, enabling faster, more informed decision-making.
Automated Workflows: Machine learning can route risk alerts or approvals to the right stakeholders based on vendor criticality, or risk type streamlining processes and enforcing accountability.
Anomaly Detection: AI algorithms can scan financial and operational data for unusual patterns (e.g., suspicious invoicing or vendor behavior), flagging potential issues early for cross-functional teams.