Strategic Focus: Mitigating Reputational Risks In Third-Party Risk Management
03 Jun, 2025
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Executive Summary
The mitigation of reputational risks has grown into a strategic imperative for firms outsourcing to third parties. Globalization and growing complexities across supply lines have proven to be a double-edged sword for third-party risk management (TPRM): while value chains benefit from increased interconnectivity, third parties are now subject to vast networks of stakeholders, regulations and geopolitical pressures – each of which presents potentially unseen reputational risks. For effective mitigation across dynamic third-party networks, firms must prioritize strategic risk assessments, continuous monitoring and advanced due diligence practices to safeguard their reputations and maintain a strategic edge in the fallout from a damaging event.
Reputational risks increase as the gap between firms and their third parties narrows
Third-party risk assessments change quickly when risk factors collide
Firms must take strategic action to maintain reputational stability
To advance TPRM strategy, firms should design risk frameworks around the entire third-party life cycle
Third-party risk assessments change quickly when risk factors collide
Firms must take strategic action to maintain reputational stability
To advance TPRM strategy, firms should design risk frameworks around the entire third-party life cycle
Figure 1. Assessments across the supplier base change quickly when risk factors meet
Figure 2. Strategic recommendations for maintaining reputational stability
Figure 2. Strategic recommendations for maintaining reputational stability
About the Authors
Tom Murphy
Analyst
Tom is an analyst in the Verdantix Risk Management practice. Prior to joining Verdantix, he worked with a think tank where he researched small-scale southeast Asian territoria…
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Katelyn Johnson
Senior Manager, Risk Management
Katelyn is the Senior Manager in the Verdantix Risk Management practice. Her current research agenda focuses on climate risk and its integration into risk management framework…
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