In May 2013 McKinsey and Company published their Working Paper on Risk, Number 46 entitled ‘Managing third-party risk in a changing regulatory environment’. This paper recognises that in the wake of the 2008 financial crisis, increasing regulatory scrutiny has led to a change in the nature of due diligence undertaken by companies.
New considerations include strategic and reputational risk and an emphasis upon increased scrutiny and accountability of third-parties. While these new requirements have posed a significant challenge for many companies, it is also acknowledged that effective third-party management is a mainstay of good operational health and cost management.
This Working Paper can be found here: Mckinsey & Company – Managing third-party risk in a changing regulatory environment