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A Vendor Risk Management Policy sets clear rules for how organizations evaluate, monitor, and manage risks when working with external suppliers and contractors in Saudi Arabia. It helps businesses comply with key regulations like the Saudi Procurement Law while protecting themselves from operational, financial, and cybersecurity threats.

This policy guides teams through vendor selection, due diligence, contract reviews, and ongoing monitoring. It includes specific requirements for data protection under SAMA guidelines, ensures Shariah compliance in financial dealings, and establishes response procedures for vendor-related incidents. Companies in regulated sectors like banking and healthcare rely on these policies to maintain strong vendor relationships while meeting strict regulatory standards.

Use a Vendor Risk Management Policy when your organization starts working with new suppliers or needs better control over existing vendor relationships in Saudi Arabia. This policy becomes essential when managing critical vendors who handle sensitive data, provide key services, or access your systems—especially in sectors like banking, healthcare, or government contracting.

The policy proves particularly valuable during vendor selection, contract negotiations, and when responding to SAMA audits or regulatory reviews. It helps protect your organization from supply chain disruptions, data breaches, and compliance violations under Saudi law. Many companies implement it before major procurement initiatives or when expanding their supplier network across different regions.

• Basic VRM Policy: Outlines fundamental vendor screening, risk assessment, and monitoring processes—ideal for small to medium businesses under Saudi commercial law
• Enhanced Financial Services VRM Policy: Contains additional controls for SAMA compliance, Shariah requirements, and strict financial sector regulations
• Critical Infrastructure VRM Policy: Features heightened security measures and detailed contingency planning for government contractors and essential service providers
• Technology Vendor Policy: Focuses on cybersecurity, data protection, and digital service provider management under Saudi data protection frameworks
• Supply Chain VRM Policy: Emphasizes logistics, import/export compliance, and local content requirements under Saudi Vision 2030 guidelines

• Risk Management Teams: Lead the development and maintenance of Vendor Risk Management Policies, conduct assessments, and monitor compliance
• Legal Department: Reviews policy alignment with Saudi regulations, SAMA guidelines, and contractual obligations
• Procurement Officers: Apply policy requirements during vendor selection and contract negotiations
• Department Managers: Ensure their teams follow policy guidelines when engaging with vendors
• Vendors and Suppliers: Must comply with policy requirements and undergo regular assessments
• Compliance Officers: Monitor adherence to policy standards and report violations to senior management

• Regulatory Review: Gather current SAMA guidelines, Saudi procurement laws, and industry-specific requirements
• Risk Assessment: Document your organization's vendor types, risk tolerance levels, and critical service dependencies
• Internal Input: Collect feedback from procurement, legal, IT, and business units about vendor management challenges
• Process Mapping: Outline your vendor lifecycle from selection through termination
• Control Framework: Define risk categories, assessment criteria, and monitoring requirements
• Policy Structure: Our platform helps generate comprehensive policies that include all required elements while ensuring Shariah compliance
• Approval Process: Plan review steps with key stakeholders before final implementation

• Policy Purpose: Clear statement of objectives and alignment with Saudi regulations
• Scope Definition: Types of vendors covered and risk categories under SAMA guidelines
• Due Diligence Requirements: Vendor assessment criteria and Shariah compliance checks
• Risk Classifications: Defined risk levels and corresponding control measures
• Monitoring Procedures: Performance tracking and compliance verification processes
• Data Protection: Requirements aligned with Saudi data protection frameworks
• Incident Response: Steps for handling vendor-related issues or breaches
• Review Cycle: Policy update frequency and approval procedures

A Vendor Risk Management Policy differs significantly from a Risk Management Policy in both scope and application. While they may seem similar, each serves distinct purposes in Saudi Arabia's regulatory framework.

• Focus and Scope: Vendor Risk Management Policies specifically target external supplier relationships and third-party risks, while Risk Management Policies cover all organizational risks, including internal operations, market conditions, and strategic decisions
• Regulatory Compliance: Vendor policies must align with SAMA's specific third-party guidelines and Saudi procurement laws, whereas general risk policies address broader regulatory requirements
• Implementation Level: Vendor policies include detailed procedures for supplier assessment and monitoring, while Risk Management Policies establish high-level risk governance frameworks
• Stakeholder Involvement: Vendor policies primarily engage procurement and vendor management teams, while Risk Management Policies involve all departmental heads and executive leadership