Nasdaq Publishes Paper on Third Party Risk and Board Oversight

The Nasdaq Center for Board Excellence recently released a paper titled “The Board and Management’s Role in Assessing Third-Party Risk.” The paper highlights that boards “play a crucial role in ensuring the companies they oversee are performing the due diligence necessary to assess any risks that third parties pose to the company and its operations.” The paper emphasizes that boards should examine risk factors, utilize “tabletop scenarios,” ensure the board has access to continuing cyber education, and foster open communication between the board and management. Third party vendors can provide a variety of services but boards should ensure management considers what happens if there is a breach at the vendor, or even a scenario where the vendor is out of business. The paper emphasizes that third parties “have the power to help rapidly grow your company, but the board and management should work to ensure they do not have the power to take down the company as well.”

Click here to read the Nasdaq Center for Board Excellence paper “The Board and Management’s Role in Assessing Third-Party Risk.”