The Human Factor: People-Centric Best Practices in Third-Party Risk Management

While technology and processes play a crucial role in Third-Party Risk Management (TPRM), it’s important not to overlook the human factor. People are at the heart of effective risk management, and organizations must implement people-centric best practices to enhance their TPRM strategies. This article explores the significance of the human factor in TPRM and presents key practices that focus on individuals and their roles in managing third-party risks.

Foster a Risk-Aware Culture

Creating a risk-aware culture is essential to ensure that everyone within the organization understands the importance of TPRM. Educate employees about the potential risks associated with engaging third parties and promote a sense of ownership in managing these risks. Encourage open communication and provide training programs to enhance risk awareness and promote a proactive approach towards identifying and reporting potential risks.

Establish Clear Roles and Responsibilities

Clearly define roles and responsibilities for managing third-party risks. Designate individuals within the organization who will be responsible for overseeing TPRM activities. This includes identifying third-party risks, conducting due diligence, monitoring performance, and responding to incidents. Communicate these roles and responsibilities effectively to ensure accountability and streamline the TPRM process.

Involve Stakeholders

Engage stakeholders throughout the TPRM lifecycle. This includes representatives from legal, procurement, IT, compliance, and other relevant departments. By involving stakeholders from different areas of the organization, a holistic view of third-party risks can be achieved. Collaboration and coordination among stakeholders enable a comprehensive understanding of the risks involved and facilitate effective risk mitigation strategies.

Implement Training and Awareness Programs

Provide comprehensive training programs to employees involved in TPRM. This training should cover topics such as risk assessment methodologies, due diligence processes, contract review, and incident response. Ensure that employees have a clear understanding of their roles and responsibilities in managing third-party risks. Regularly update the training to reflect emerging risks and best practices in the field.

Encourage Effective Communication Channels

Establish effective communication channels to facilitate the flow of information related to third-party risks. Encourage employees to report any concerns or incidents promptly. Implement mechanisms for anonymous reporting to ensure that individuals feel comfortable raising potential risks without fear of retribution. A culture of open communication enables early detection and swift response to mitigate risks effectively.

Regularly Monitor and Evaluate Performance

Continuously monitor and evaluate the performance of individuals involved in TPRM. Assess their adherence to established processes, compliance with policies, and effectiveness in managing third-party risks. Recognize and reward individuals who demonstrate excellence in risk management and encourage continuous improvement. Performance evaluations provide valuable feedback and ensure accountability within the organization.

Stay Informed and Adapt

Keep abreast of emerging risks, regulatory changes, and industry best practices in TPRM. Stay connected with professional networks, attend industry conferences, and participate in relevant training programs. Continuously update the TPRM framework to incorporate new insights and adapt to the evolving risk landscape. Encourage individuals involved in TPRM to engage in ongoing professional development to enhance their knowledge and skills.


In Third-Party Risk Management, the human factor is critical for success. By fostering a risk-aware culture, clearly defining roles and responsibilities, involving stakeholders, providing training and awareness programs, encouraging effective communication, monitoring performance, and staying informed, organizations can enhance their TPRM strategies. People-centric best practices empower individuals to actively manage third-party risks, leading to improved risk mitigation and overall organizational resilience.