Risk management advisory firm Kroll has launched a new tool that helps cost-effectively assess the risks of bribery and corruption that a client company faces in its business relationships. Called the 3rd Party Risk Assessor, the tool incorporates data on up to 10 attributes of a third-party organization and its interactions with the Kroll client:
- country of operation,
- country of payment,
- length of the relationship,
- nature of the relationship,
- criticality of the relationship,
- government involvement,
- level of oversight that the client has over the third party,
- industry of the third party,
- length of time it’s been in business, and
- annual revenue.
For some of these attributes, Kroll gathers information from its client; for others, it uses information collected in a proprietary database. The tool combines data from both sources, then calculates the third party’s risk of bribery and corruption.
“Over the last couple of years, there’s been a lot of angst in terms of how to approach this type of risk at the corporate level,” says Michael Varnum, managing director at Kroll Advisory Solutions. “We developed this tool to help clients create a risk-based approach to addressing their third parties. Once an organization does the risk assessment, then it can decide ‘If 10 percent of my third-party population is high risk, what am I going to do for due diligence?’”