Close

Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.

×

Status message

Start your free, no obligation 5-day trial to continue exploring with full access.

Compliance clauses can keep third parties in line, regulators at bay

Joe Mont | September 13, 2016

No company is an island unto itself. Vendors, distributors, suppliers, sales agents, and other third parties are all part of an extended “family” that will expand its risk profile.

Regulators, in the United States and abroad, are increasingly holding companies responsible for their partners’ problems, with the sins of sub-contractors visited upon the prime. Domestically, the government’s growing focus on money laundering, corruption, bribery, and violations of the False Claims Act enhance the risk of mammoth fines, lost contracts, and personal liability.

A baseline strategy for minimizing third-party risks is the use of compliance and ethics clauses in the contracts that establish ground rules for a business relationship. Drafting effective clauses, and ensuring that everyone adheres to them, was the focus of a recent panel discussion during the annual meeting of the American Bar Association’s Business Law Section in Boston.

The process is not as simple as...

Read this single article for $49, or click the subscribe button below to review subscription options.

Enjoy unlimited access to thousands of articles, browse five years of digital magazines, qualify for reduced admission to events, and more.