Resource - Policy Template
Vendor Risk Management Policy Template
A free, structured framework for governing your third-party risk programme. Define scope, ownership, risk tiers, due diligence and monitoring - grounded in our Start with Where. methodology, so the policy targets the dependencies that carry real business risk.
Why a vendor risk policy matters
A policy turns ad-hoc vendor checks into a governed programme. Without one, effort is spent on every vendor equally, critical dependencies go unmonitored, and regulators see a spreadsheet where they expect a framework. The right policy is anchored to where your business actually depends on third parties.
Policy without a map is a checklist
Most vendor risk policies read the same: tier your vendors, send questionnaires, score them. Without knowing which vendors actually carry the business, the policy governs effort evenly across vendors that matter and vendors that do not. The map is what makes the policy proportionate.
Regulators ask for governance, not just scores
DORA, the SA FSCA and PA Joint Standards, and operational-resilience regimes expect a documented framework - who owns the risk, how it is tiered, and how it is monitored. A scored spreadsheet is not a policy. This template gives you the structure they look for.
Start with Where. - then apply the policy
The 'Where.' step is dependency mapping: which service relies on which vendor. The policy then says what to do about it. Mapping first means every clause in the policy - due diligence, monitoring, exit - targets the dependencies that genuinely carry risk.
The framework
Eight sections of a defensible vendor risk policy
Each section below is a policy clause you can adapt. Read them in order: the framework moves from purpose and scope, through the mapping step that makes the rest proportionate, to the controls and exit provisions that complete the lifecycle.
1. Purpose and Objectives
State why the policy exists: to establish a consistent approach for identifying, assessing and managing the risks introduced by third parties that support business services. Name the outcomes the programme is accountable for - visibility of dependencies, proportionate controls, and resilience of critical services.
2. Scope and Definitions
Define what counts as a 'third party' for your organisation: vendors, suppliers, outsourced service providers, cloud platforms, subcontractors and fourth parties reached through them. Clarify that the policy applies from onboarding through offboarding and covers both contracted and informal arrangements.
3. Roles and Responsibilities
Assign ownership. A typical structure: the business service owner identifies dependencies, procurement initiates onboarding, risk and compliance sets the assessment standard, and a third-party risk function maintains the register and map. Name the board or committee that receives the residual-risk view.
4. Dependency Mapping (Start with Where.)
Before any vendor is scored, the organisation traces which business services, processes and data flows rely on each third party. The dependency map is the foundation: it decides what gets assessed, how deeply, and who needs to know. This is the 'Where.' step - you cannot govern what you have not mapped.
5. Risk Tiers and Categorisation
Tier vendors by the criticality of the services they support and the sensitivity of data they touch - not by spend. A tier-1 payments processor and a marketing SaaS are not the same risk. The dependency map supplies the criticality signal; tiers drive the depth of due diligence and monitoring that follows.
6. Due Diligence and Onboarding
Set the evidence each tier must provide before a relationship starts: security certifications, financial standing, control attestations, subcontractor disclosure and business-continuity provisions. Scale the requirement to the tier so a low-criticality vendor is not held to the same bar as one that keeps a revenue line running.
7. Ongoing Monitoring and Review
Define how each tier is monitored between assessments: security-rating feeds, incident notifications, control re-attestation cadence, and trigger-based reviews when a vendor changes ownership, infrastructure or subcontractors. Monitoring is continuous for tier-1 dependencies and scheduled for the rest.
8. Incident, Concentration and Exit
Cover what happens when a vendor fails or a concentration is exposed: incident roles, escalation, contingency arrangements, and the exit criteria for offboarding. Require that every tier-1 dependency has a documented contingency and that concentration on shared infrastructure is reviewed at least annually.
Adapt this template for your organisation
Copy the eight sections above into your policy document and adapt the ownership, tier definitions and cadences to your regulatory environment and risk appetite. Pair the policy with the dependency map so every clause is anchored to a real business service.
The foundational principle
Start with Where.
Every clause in this policy - due diligence, monitoring, exit - only makes sense once you know where your business depends on each vendor. Dependency mapping is that step. It traces business services to the third parties that deliver them, so the policy targets the dependencies that carry real risk instead of governing every vendor identically.
Start with where. Then write the policy, run the assessments, and report with confidence that the controls match the exposure.
What a good policy achieves
The point of the policy is not paperwork. It is proportionate, defensible governance - effort and attention concentrated where a vendor failure would actually hurt the business.
Frequently asked
What is a vendor risk management policy?
A vendor risk management policy is the documented framework an organisation uses to govern the risks introduced by its third parties. It defines scope, ownership, risk tiers, due-diligence requirements, ongoing monitoring and incident response. VenDefend's free template is structured around the Start with Where. methodology, so the policy targets the dependencies that actually carry business risk.
How do I create a vendor risk management policy?
Start by mapping which business services depend on which vendors - the 'Where.' step. Then define scope and roles, tier vendors by service criticality rather than spend, set tier-based due-diligence and monitoring requirements, and document incident and exit procedures. This template lays out each section with the content to adapt for your organisation.
Is this template free to use?
Yes. The framework on this page is free to adapt for your organisation. You can also download our complementary Executive TPRM Readiness Assessment to benchmark your programme against the policy structure before you roll it out.
Does this satisfy regulatory requirements?
The template is structured around the governance questions regulators ask - ownership, tiering, due diligence, monitoring and resilience. It is a starting framework, not legal advice or a certification. Adapt it to your specific regulatory mandate and have it reviewed by your compliance and legal functions.
How is this different from a vendor risk assessment?
An assessment scores an individual vendor. A policy defines how the whole programme governs every vendor - the rules assessments operate under. The policy sits above the assessment: it decides what gets assessed, how deeply, and what happens with the result. VenDefend's Start with Where. methodology connects the two by ensuring the policy is anchored to real business dependencies.
Start with Where.
A 45-minute executive review. We map one critical service with you and show you what your current programme is missing.