Third-party relationships introduce significant risks across cyber security, procurement, legal, privacy, data governance, and HR. Organisations must adopt structured approaches to mitigate third-party risks while maintaining operational efficiency. This table summarises different third-party risk management strategies, their advantages, and their limitations.
Third-party risk management approaches
| Approach | Description | Advantages | Disadvantages |
| Centralised | A single team manages all third-party risks across the organisation. |
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| Decentralised | Each business unit independently manages its third-party risks. |
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| Hybrid | Central governance sets policies, while business units execute risk management within guidelines. |
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Organisations must align their third-party risk management approach with their risk appetite, operational needs, and regulatory requirements. While a centralised model ensures consistency, decentralisation offers flexibility. A hybrid model often provides the best balance. Regardless of approach, integrating role-specific risk management strategies is essential for comprehensive protection.
How does your organisation manage third-party risks? Share your approach in the comments or reach out for a discussion on best practices.
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