Be diligent: Customers, partners and suppliers: avoiding risk and building benefits
As companies’ reliance on third parties — such as contractors, partners and suppliers — increases, the need to both detect and prevent risk from these third parties becomes ever more important. National legislation with broad international reach is increasing the acute risk of legal non-compliance and the associated impact on corporate reputation. A risk-based due diligence approach is required to detect and prevent these risks.
In some sectors — particularly construction — companies can critically depend on third parties. It is not unusual for more than 90 percent of any given contract value to be passed on to these third parties. Some of the types of risk and potential impact that these third parties can bring include:
• If the third party has financial issues during the relationship, it can lead to delays in the work and overall contract delivery.
• If a third party behaves in an overly contractual or argument