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Risk Insider: Quin Rodriguez

How Vendor Risk Management Affects Your Brand

By: | March 23, 2018 • 3 min read
Quin is responsible for leading Riskonnect's vision to drive growth and engagement in the Integrated Risk Management market. Quin has 18+ years of Executive Sales Management and Leadership experience with 10 of those in the GRC Industry. His primary focus the past ten years has been in BFSI, Retail, Tech & Communications and Manufacturing.

There are a lot of famous quotes about people being judged by the company they keep. These quotes ring particularly true for businesses who, until recently, could largely partner with vendors without any scrutiny.

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But those days are over. Thanks to the demand for transparency from today’s consumers, people now consider a company’s social consciousness and action when determining brand perception. The proverbial company that businesses keep, including their vendors, is now a large part of their overall brand image.

Companies no longer have the luxury of the blame game when it comes to their vendors/suppliers. Instead, today’s economy squarely places the blame on the parent brand.

For example, if a consumer finds out your electronics company uses parts shipped from a warehouse that employs underage workers, they will take their business elsewhere, but not before broadcasting this information over social media. Likewise, if you outsource your cyber security and experience a security breach, your brand is front and center, not your outsourced vendor.

How to Protect Your Brand

As these vendor risks abound, what steps can you take to protect your brand? Three common practices I recommend are regularly conducting vendor evaluations to understand your exposure, developing proactive vendor risk practices to address risks as they arise and looking beyond your vendors to understand their suppliers.

When selecting your vendors, it is important to be vigilant in the vetting process, ensuring potential vendors align with your company’s mission, values and standards. Once selected, actively monitor your vendor practices to ensure they remain compliant and accountable.

Staying ahead of risks means understanding how worldly changes affects your vendor practices, including political leadership and government regulation changes.

Companies no longer have the luxury of the blame game when it comes to their vendors/suppliers. Instead, today’s economy squarely places the blame on the parent brand.

Being proactive is the key to understanding and mitigating vendor risks before they snowball into larger issues. Your risk management team should take note of common vendor issues and develop strategies to proactively combat these issues.

One recommendation is to follow competitor and industry news to identify vendor risks and develop strategies to address these risks. While these risks may not be currently affecting you, having a plan established and learning from your competition will help ensure you are ready to address any situations that arise.

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While it is easy to just look at your direct vendors/suppliers, having a true vision of your vendor risk requires you to dig deeper. Actively examine and monitor your third, fourth, fifth and even sixth-party vendors to understand their practices.

While this may initially seem excessive, when these vendors advance into a crisis, customers will extend the blame to all involved parties. The major brand will catch most, if not all, of the heat regardless of how much insight they had into the issue.

When it comes to vendor risk management, the biggest brand name is bound to face the most scrutiny. While companies may choose to finger-point to their vendors, at the end of the day, they, not their vendors, remain the face of the issue.

It’s all about the company you keep. Thus, brands must bring vendor risk management to the forefront of their initiatives to ensure they are actively monitoring and managing their key partners.

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The R&I Editorial Team can be reached at [email protected]