Third-party providers

Abstract

How do effective directors ensure they have sufficient oversight and assurances around third-party providers used by the organisation they serve? Based on a framework of global corporate governance best practice, which can be used in all organisations anywhere in the world, this chapter of Questions To Ask (QTA) in the boardroom gives a high-level but succinct introduction to considerations boards should have with regards to third-party providers. All directors should ensure that organisations, suppliers, agents, individuals, or vendors acting on behalf of or with the company are being appropriately managed by the executive team. The chapter considers the inherent risks companies take when using third-party providers. Sustainability, ethical standards, environmental, social, governance measures, and corporate social responsibility need to be included in regular reporting from third-party providers as well as their insurance covers, cybersecurity framework, data protection, and so on. The chapter’s introduction leads into outlining the key Questions To Ask, giving the reader further insight into how to initiate discussions about the practical details requiring the attention of the board. The suggested questions cover questions to be asked within the boardroom and questions to ask the third-party providers on a regular basis as part of the assurances the directors need to discharge their duties.