As risk vectors evolve, it’s critical that organizations implement a business strategy that unites risk domains and keeps trust management top of mind. This includes standing up a holistic trust solution that defines goals across the domains of ESG (environmental, social, and governance), Security, Privacy and Ethics.
Additionally, such solutions must focus on integrity and brand reputation while driving revenue retention and growth. Vendor Risk Management (VRM) plays a critical role in achieving each of the above and is a critical component of Third-Party Trust Management (TPTM). Here we explore the relationship between holistic trust management, VRM and TPTM starting with one role: the Chief Trust Officer (CTRO).
Download The Ultimate Guide to Vendor Risk Management to learn more about the importance of Vendor Risk Management.
The Chief Trust Officer & Vendor Risk Management
When analyzing business strategy from a trust-focused lens, it’s important to understand the role that the Chief Trust Officer plays. CTROs have a specific risk domain that they care about: trust. Third-party management has seen a major shift emphasizing the criticality of Ethics and ESG in addition to the traditional considerations of security and privacy. Ensuring you work with only trusted third parties is a common thread that spans all risk domains and influences a business strategy driven by trust and through the office of the CTRO.
Understanding the vendors that you work with and how you work with them is critical to any trust program. And as more and more business initiatives are being outsourced and risk domains expand, Chief Trust Officers need visibility into their vendor inventory so they can better understand the impact that their vendor ecosystem has on their brand reputation and the relationship they have with consumers and key shareholders.
Read the blog to learn more about the importance of the Chief Trust Officer in overall business strategy.
Top Challenges for the CTRO
As VRM’s criticality increases and risk domains expand, third-party management teams and CTROs should consider consolidating a number of different disciplines that are traditionally own by different teams and operated in siloes.
- Third-party Risk Management (TPRM) considerations for the CTRO require continual reassessment and risk monitoring to reduce security and privacy risks relating to third parties. The CTRO must work in tandem with the CISO and CPOs (both procurement and privacy) to solve challenges such as automating vendor security and privacy assessments, managing and monitoring your vendor inventory, and streamlining risk mitigation.
- Third-Party Due Diligence (TPDD) considerations for the CTRO require compliance checks and screening (as well as ongoing monitoring) of third parties to focus on the ethics & compliance risks associated with third parties. These checks look for specific concerns, such as adverse media, sanctions, and PEPs (politically exposed persons). This ensures that ethical concerns are being considered across the business and further establishes trust with third parties. Together with TPRM, TPDD adds an additional screening and monitoring element to help alleviate ethics and compliance concerns.
- Supplier Sustainability and Responsibility (SSR) for the CTRO requires supplier ESG assessment and mitigation by flagging ESG risks and helping organizations understand the sustainability and responsibility initiatives of their suppliers. This informs internal ESG program metrics and enables the creation of public-facing ESG reports, all of which are critical to trust.
- Third-Party Trust Management (TPTM) focuses on alignment across risk domains it’s important to consider that third-party security and privacy analysis may require a different set of functionalities than those focused on analyzing the ethics or ESG risk relating to a third party. The CTRO must understand the specific needs of each domain and have an action plan for each.
Solutions & Best Practices
Enabling yourself, your team, and employees across all levels of your enterprise to understand vendor-associated risk is imperative in establishing a strong culture of trust within your vendor risk management program. When combating challenges rooted in rapid outsourcing expansion and increased risk domains, it’s crucial the CTRO considers these key areas with VRM in mind:
- Define trust universally across your business and understand what it means in the context of third-party relationships.
- Understand and prioritize the fulfillment of customer expectations around third-party data and trust.
- Advocate for trust-first decision-making across the vendor ecosystem and within partnerships.
- Consider how the third parties you work with impact employee retention and satisfaction as key (the businesses you work with are a reflection of your organization)
- Implement a TPTM strategy by bringing together teams and workflows across key risk domains that are involved in the evaluation and ongoing monitoring of a third party.
The ideal outcome is that CTROs can understand the role that vendors play in trust across the organization.
How Can OneTrust Help?
Our Third-Party Trust solutions (TPRM, TPDD, and SSR) can help bring a third-party management program under one roof, while still giving individual teams the capabilities they need to operate efficiently. To learn more, request a demo today!