Continuous improvement can take many ways, shapes and forms. One thing that is most generally not considered is the financial health of the third-party. It turns out such an oversight may have some significantly ramifications for an accurate picture of a third-party. The financial health of third-parties is not only a key metric but also a key due diligence tool which allows a more robust assessment prior to contract signing and in managing the relationship after the contract has been signed.
Continuous improvement through monitoring of ongoing financial health is a tool where technological solutions can have an impact. Understanding the financial viability of third-parties can help the compliance practitioner meet the DOJ requirement to more fully operationalize a compliance program. It can also lead to more and better operational stability and with that ever-sought increase in corporate profitability. As compliance moves into the business process, this type of review should become part of your compliance toolkit going forward.
Three key takeaways:
- What is the financial health of your third-parties?
- Poor financial results can open a company to engaging in risky behavior.
- Financial health monitoring can be used as continuous improvement.