Vendor Risk Management Policy

What it is, why you need it, and how to use it.

You might be thinking something like:

“Meh! We don’t need another policy that nobody will read! Policies are a waste of time, especially a Vendor Risk Management Policy!”

I get it. People aren’t thrilled by policies. They’re not exciting. They’re not fun either. For some, policies can even be painful.

Policies get a bad rap. Not because they’re evil or anything, but because people rarely use them well. The fact is, information security policies play a very important role in supporting all information security efforts, and a vendor risk management policy plays a very important role in supporting our vendor risk management efforts.

I don’t like wasting people’s time, so I’ll get right to the point. Most policy problems are founded in the confusion about what a policy is, why they need one, and how they should be used. So, let’s address this as simply as possible. After all, complexity is the enemy of good information security (remember this always).

NOTE: In some organizations, vendor risk management and third-party information security risk management have slightly different meanings. Third-party information security risk management is part of a greater vendor risk management effort. For the purposes of this article, we’re using vendor risk management and third-party information security risk management synonymously.

What a Vendor Risk Management Policy is

The “what” for any policy are the rules. Think of this in terms of a game. A policy defines the rules for the game. A vendor risk management policy defines the rules for the vendor risk management game. Simple.

If you’ve never played the vendor risk management game before, this could be a difficult policy for you to define. If this is you, ask someone you trust for help. Here are two options for you right now:

  1. You can download our template. Change the rules to fit the game that you’re willing to play and make it yours.
  2. Contact SecurityStudio – The experts at SecurityStudio will make sure you get all the answers you need.

There are some typical structural things that should found in every policy, including this one. Policies should contain a purpose statement, note the audience for the policy, the policy status (draft, approved, adopted, etc.), version, date, the policy itself (the rules), references (to standards and/or other documentation), enforcement intentions, and version history.

Your game, your policy. Don’t expect someone else’s policy to fit as-is, and don’t include rules that you don’t intend to play by.

Why you need a Vendor Risk Management Policy

If the “what” for policy are the rules, the “why” for policy is communication. Policies are used to communicate the rules to others. You don’t need a policy if you don’t have anyone to communicate the rules to. Good news, right?

Before you rejoice, it’s very unlikely that you have no one else to communicate the rules to. There’s almost certainly someone else who needs (or wants) to know the rules.

Think about who needs to know the rules for your vendor risk management game. The list could include:

  • Anyone else within your organization that participates in vendor risk management activities.
  • Anyone who’s interested in your organization’s vendor risk management activities (examiners, regulators, partners, etc.)
  • Anyone who’s ultimately responsible for your organization’s vendor risk management activities, including executive management and the board of directors (if one exists).

The more people who need to know about your rules, the more important the policy becomes. In a small organization where there is a single person who does all the vendor risk management activities, there’s less importance. Not “no” importance, just less importance.

How to use a Vendor Risk Management Policy

Once you’ve written a policy, it’s time to figure out how to use it. Every policy, including this one, must be approved, communicated, adopted, and adjusted (or revised). This is a policy lifecycle that is well understood by most.

  • Draft – The policy is drafted (as v1 in new policies, as incremented version in subsequent cycles).
  • Approve – The policy must be approved by someone with authority (executive management, BoD, etc.).
  • Communicate – The policy must be communicated to all personnel who are affected by it.
  • Adopt – Gap analysis (or audit) coupled with plans and projects to ensure compliance.
  • Review/Revise – Periodic (and regular) review of policy, suggested edits move forward.

Policies are reference documents and should be written this way. Let’s go back to our game comparison.

When you sit down with friends to play a new board game, how many people read the rules? Just one, and this is the de-facto person who oversees the game. How many people should read your policies (rules)? Just the person (or group) who oversees the game. As the game is played, the rules are referenced whenever a question comes up. Same goes for policies.

That’s it. Simple. Define the rules for vendor risk management, communicate the rules, and manage the rules. Vendor risk management policy in a nutshell.

Having a policy in place is great, but also having a workflow that evaluates all third-party vendors and brings your weakest links to the surface is even better. Schedule a demo with us today to get your easy-to-use vendor risk management program.

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