Vendor Management Policy

Company: [Company Name] · Effective Date: [Date]

Purpose

This policy establishes a consistent process for selecting, onboarding, and monitoring third-party vendors to manage business, financial, and security risk.

Vendor Risk Tiers

Vendors are classified by risk level based on: data access, financial exposure, and business criticality — [High/Medium/Low] tier, with review requirements scaling accordingly.

Onboarding

Before engaging a new vendor: [required due diligence — business verification, references, insurance certificates, security questionnaire for vendors handling data], and contract review by [Legal/Procurement].

Contract Requirements

Vendor contracts should include, where applicable: [confidentiality/data protection terms, liability and indemnification provisions, termination rights, and service level commitments].

Ongoing Monitoring

High and medium-tier vendors are reviewed [Frequency] for continued compliance, performance, and financial stability.

Vendor Access Management

Vendor access to Company systems/data is granted on a least-privilege basis and revoked promptly upon contract termination or when access is no longer needed.

Incident Response

Vendors are required to notify Company of any security incident affecting Company data within [Timeframe], per contractual terms.

Offboarding

Upon vendor termination: [access revoked, company data returned/destroyed and confirmed, final invoices reconciled].

Adopted by: ______________________ Date: ____________

*Tiering vendors by actual risk (Section on Vendor Risk Tiers) — rather than applying the same heavy due diligence to every vendor regardless of exposure — is what keeps a vendor management program sustainable; treating a low-risk office supplier the same as a vendor handling customer payment data wastes review effort where it matters least.*