CHICAGO — At our session this afternoon examining third party risks, a panel of Baker & McKenzie partners shared insights on overcoming third-party risks related to corruption, supply chain and commercial issues.
Some key takeaways from the discussion:
- The anti-corruption enforcement surge that began a decade ago is still ongoing and shows no sign of abating.
- The definition of “third party” is broader than you may think – it includes channel partners, dealers, re-sellers, distributors, as well as vendors who act on a company’s behalf.
- A recent study found 31 percent of US/UK companies do not consider corruption issues when conducting transactional due diligence.
- On commercial supply chain risks, many companies are still content to do business with purchase orders rather than contracts or agreements. There are risks associated with doing business that way.
- In a recent report by the University of Tennessee on managing risks in the supply chain, supply chain managers were asked to list their top supply chain risks. The top three answers were: Quality Issues, Increased Inventory Handling, and Natural Disasters — none of which are really legal issues. But the legal risks should likely be closer to top of mind in managers’ minds.