Hi there,
While there isn't a specific template available for managing fourth-party risks, you can definitely incorporate relevant content into your existing policy to cover this topic. I don't recommend creating a separate policy, as it might be overlooked or cause confusion among stakeholders. It's important to note that the policy sets the minimum requirements and expectations for managing third-party risk at your organization. Therefore, if you decide to include content related to fourth and nth party risks, it's crucial to have the necessary mechanisms in place to monitor and enforce those requirements.
Depending on the structure of your current third-party risk management (TPRM) policy, you may choose to add a single section that addresses fourth and nth parties as a whole, which could look something like this.
Fourth and Nth Party Risk
The company acknowledges that its direct third parties may engage subcontractors (fourth and nth parties) to produce or provide products and services to our organization and its customers. While the direct management of fourth and nth party relationships is the responsibility of the third parties, the company is obligated to ensure that its third parties:
· Identify relevant fourth and nth party relationships
· Have effective Third-Party Risk Management (TPRM) programs to identify, assess, manage, and monitor those relationships
· Furnish evidence of their TPRM practices throughout the duration of the relationship
· Promptly inform the company of any significant issues pertaining to fourth and nth parties
To the extent that fourth and nth party risks vary, the company utilizes a risk-based approach to determine necessary activities to perform, the level of oversight, frequency of review, and contractual terms to ensure optimal management and oversight of fourth and nth party risk.
In its commitment to risk management, the company reserves the right to terminate third-party relationships if risks arising from subcontractors are not adequately addressed.
Of course, if you want to provide more information, you can do so where it makes sense (risk assessment, due diligence, contracting, etc.)
If your policy provides key terms and definitions, it is helpful to add an entry for fourth and nth parties. That may look something like this:
Fourth or Nth Party (Subcontractor)
The terms "fourth party" and "nth party" (or subcontractor) broadly refer to any individual, independent consultant, or legal entity (including, but not limited to: vendors, service providers, suppliers, processors, business partners, marketers, or other third parties) with whom a direct third party (or fourth party, and so on) contracts to obtain products or services, or who collaborates with a direct third party in providing products and services directly to (company name), its customers, employees, or investors.
I hope this information is helpful, but I welcome comments and suggestions from other members as well.
Original Message:
Sent: 07-22-2024 05:10 PM
From: Anonymous Member
Subject: Fourth-Party Template
This message was posted by a user wishing to remain anonymous