Some third parties create real legal risks.

Other third parties create reputational risk.

Not all third parties are the same.

One of the most important concepts in modern third-party risk management is distinguishing between acting vendors and incidental vendors.

An acting vendor performs services on your behalf.

Think customer service providers, recruiters, customs brokers, distributors, and payment processors.

When these vendors use AI or engage in misconduct, liability flows to your company.

Incidental vendors present a different risk profile.

Their primary exposure may be reputational rather than direct legal liability.

This distinction is critical and allows companies to focus their resources where they matter most when it comes to mitigating risk.

The Ethics and Compliance Q and A show is produced by One Stone Creative.