Components of a comprehensive third-party risk program
Effective compliance programs typically involve people, processes, technology, and governance. Life sciences organizations should determine the configuration and maturity level appropriate for their industry, risk profile, and processing activities.
People
At its core, an effective third-party risk program is built on a foundation of accountability. Simply put, life sciences privacy leaders must formally assign responsibilities for various parts of the third-party risk program to qualified personnel.
Depending on the estimated number of current third parties and available resources, a privacy leader might opt to staff a nascent program with a dedicated privacy operations analyst and task that individual with conducting the third-party privacy risk assessments. In smaller organizations or privacy programs with tighter budgets, existing third-party security risk staff might be enlisted to take on the additional responsibility of privacy assessments. This resource likely could take on responsibilities for maintaining the vendor data inventory, administering the assessment questionnaires, third-party risk tiering, and configuring related tooling. Many leaders find outsourcing arrangements, particularly those based in low-cost geographies, suitable for accommodating the ebb and flow typical of low-volume operations.
Additionally, the legal function must explicitly perform several processes. Namely, privacy counsel should prepare, negotiate, and review each data processing agreement and, where applicable, standard contractual clauses entered with third parties. And because legal likely is where the life sciences data privacy officer sits, the function also will need to be responsible for advising on and monitoring the corresponding data protection impact assessments and transfer impact assessments.
The third-party risk management team must work directly with the privacy officer to verify compliance with privacy requirements. Roles and responsibilities should be formally defined and documented in the appropriate governance documents. High-level descriptions are typically memorialized in the data protection policy or a separate privacy roles and responsibilities policy. Process-level roles are similarly defined in the standard operating procedures (SOPs), or in this case, the third-party privacy risk SOP. By defining and documenting these roles and responsibilities, the life sciences organization can help everyone know and understand their obligations to the program.
Processes
SOPs are excellent means of defining, documenting, and formalizing processes. Written SOPs can be mapped to relevant regulatory requirements and used as evidence of audit compliance. However, sometimes organizations need to capture greater detail than typical governance documents provide. In those situations, life sciences organizations can prepare detailed process documentation, including, but not limited to, process model illustrations and a program charter.
A program charter outlines the principles and objectives of the third-party risk program. It is a foundational document that sets the direction and framework for the entire program. Within this program charter, it is essential for organizations to explicitly include adherence to privacy regulations as a fundamental tenet. By doing so, organizations demonstrate their commitment to integrating privacy considerations into the third-party risk framework from the outset.
Technology
Technology is indispensable to managing the third-party risk program. It helps to streamline and improve the efficiency and effectiveness of the underlying tasks and activities. With better tools in place, privacy leaders can avoid manual workflows in which third-party privacy assessments must be emailed, causing delayed responses and difficulty tracking assessment statuses and performance metrics.
Additionally, vendor data inventory services can provide valuable assistance in inventorying essential information about third parties used to evaluate their organizational risk; however, the need for privacy leaders to manage vendor information and keep records up to date still exists. Software platforms also typically offer out-of-the-box, or easily configurable, assessment workflows, periodic notifications, triggers for the automated launch of assessments, and a library of questionnaire templates based on third-party standards (for example, standardized information gathering).
As with staffing options, privacy leaders can explore opportunities to use and reuse third-party security program infrastructure for privacy purposes. At the very least, privacy should capitalize on the synergies by using the same software tools as the security team. Greater efficiencies can be obtained by using a shared automation workflow and preliminary questionnaire template. Further, staff performing tool configuration and implementation may be shared to build automation for both programs.
Governance
In the context of third-party risk, governance plays a key role in guiding and overseeing the program’s activities. This oversight includes defining the governance structure, roles, and responsibilities related to privacy risk management. Moreover, a well-defined governance framework can help all personnel be aware of their obligations and actively participate in the program.
Within the governance framework, life sciences organizations should consider the development of comprehensive third-party privacy risk policies that address privacy risks associated with third parties. These documents provide clear guidance on how privacy risks should be assessed, managed, and monitored within the organization. Policies should define the critical aspects of the third-party risk program, including a rendition of the most important regulatory requirements related to processors, data protection agreements, due diligence, and termination.
Furthermore, the governance framework should facilitate effective communication and collaboration among different departments, such as privacy, legal, procurement, individual business units, and other risk domains. A coordinated approach provides clear lines of accountability and establishes escalation procedures.
By emphasizing the importance of governance, life sciences organizations can establish a solid foundation for their third-party risk program. A well-designed governance framework promotes transparency, accountability, and effective risk mitigation, helping organizations protect sensitive data and maintain compliance with global regulations.
