Glossary definition: Vendor Risk Management (VRM)
VRM: Managing Risk with Vendors & Suppliers
Vendor Risk Management (VRM) is an enterprise-wide approach to managing risks associated with third-party vendors. It involves an organization’s proactive identification, assessment, and mitigation of risks posed by vendors. VRM involves a comprehensive review of the vendor’s security and privacy policies, documentation, and processes. It also requires an organization to monitor vendors’ performance on an ongoing basis. This includes evaluating the vendor’s ability to meet requirements, maintain compliance, and adhere to industry standards. VRM also requires organizations to have a clear understanding of the potential risks associated with vendors, including financial, reputational, legal, and operational risks. Finally, VRM requires organizations to develop and maintain a comprehensive vendor risk management program that includes policies and procedures for vendor selection, contract negotiation, and ongoing monitoring.