Mastering Vendor Management: Best Practices and Key Strategies (Full Transcript)

Speaker 1: Welcome to this week's Third Party Thursday. My name is Kellie Vick and I'm the President here at Vennminder. Today we're going to be talking about best practices in vendor management. So let's get started. With all of the information that's out there and with all the challenges facing us today, how does a responsible vendor manager keep up? New guidance takes quite a while to develop and when it's published it is often lengthy and cumbersome. For example, in the first half of 2016, 2,200 pages of new regulations have been released. Quite a task to keep up with all of the required reading. A recent article cited a compliance officer needs 450 hours just to read and interpret all of the new guidance. Then he still needs time to document it into his policies and procedures, develop education, brief senior management, educate the frontline managers and so on. It can seem like more than a full-time job. There's good news though. Anytime new guidance comes out, it is quickly followed by some terrific legal summary and analysis. Consider subscribing to various law firm newsletters. A few of our favorites are J.D. Supra, WilmerHale and Ballard Sparr. You can also find helpful webinars by these firms. Another good idea is to study the exam manual on the FFIEC website. It's literally a playbook for what the examinations may cover. Finally, benefit and learn from other successes and mistakes. A great practice is to use each enforcement action as a time to self-reflect and evaluate your own practices. In your exams and audits, spend time listening for the hints or even casual comments made by the examiners or auditors and use all of these opportunities to evaluate ways to shore up your own practices. The way to stay ahead is to pay close attention to the information that doesn't make it into your final exam report. It's generally very insightful on the things that you may want to pay closer attention to in the future exams. So other than reading and interpreting, what are some of the best practices? I always like going back to the basics, so ask yourself these questions. Is your vendor management plan inclusive enough? Does your work product match the expectations set in your vendor management policy and program documents? Is your due diligence timely and thorough? Do you have documented procedures on how to handle exceptions? Do you make it a practice of escalating issues to senior management? One of the most important practices is meeting regularly with your senior management team and don't just meet with them, get their full support and make sure your meetings are firmly documented in the minutes. There will likely be times when errors occur or a new third party slips through the cracks, but if you are in a close relationship with your senior management team, you can weather the storm more easily. The right tone set from the top is critical to a successful vendor management program. And the benefits of a well-run vendor management program are not limited simply to the examiner's request. There are true strategic benefit advantages to be gained from. Again, I'm Kellie and thanks for watching. Don't forget to subscribe to next week's Third Party Thursday video.