Risk Management Show
Avoid These 3rd Party Risk Pitfalls with Loren Johnson
Sep 9, 2024
Loren Johnson, a risk evangelist at Aravo specializing in third-party risk management, shares his expertise on navigating the complexities of vendor risks. He emphasizes the necessity of robust monitoring and resilient strategies in an evolving regulatory landscape. Loren discusses the impact of recent global events on risk management practices, the role of cybersecurity, and the significance of ethical outsourcing. He highlights challenges within the industry and the integration of AI for enhanced risk oversight, urging businesses to adopt comprehensive solutions for effective management.
22:39
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Quick takeaways
- Effective third-party risk management necessitates continuous monitoring and robust systems to navigate complexities like cyber threats and supply chain dynamics.
- The integration of AI in risk management offers efficiencies, yet raises concerns regarding algorithm transparency and demands clear governance policies.
Deep dives
The Growing Importance of Third-Party Risk Management
Third-party risk management is becoming increasingly critical for organizations as market dynamics and regulatory requirements evolve. With a focus on suppliers and partners, companies face heightened challenges in managing risks associated with third parties, especially in light of recent incidents affecting the supply chain. Loren Johnson highlights the case of Sriracha, which experienced a chili shortage due to reliance on a single supplier, illustrating the dangers of concentration risk. This growing focus on third-party relationships encompasses not just financial and delivery risks, but extends to issues such as cyber threats and ethical supply chain practices, necessitating a comprehensive approach to risk management.
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