There are three questions a company should ask itself to determine if its Vendor compliance program is on track.
- Does your vendor compliance program add layers of protection to your management company, your managed associations and your service providers?
This seems like an obvious question but one which is easy to lose track of. Have the risks your organization faces increased or decreased over the last year? Clearly not all risks can be forecasted, but at the very least a comparison should be made between known risk exposure along with an honest assessment of whether you are better prepared to deal with them now versus one year ago. For example, by analyzing how many of your vendors are compliant with your current terms and conditions today vs one year ago, you gain a sense of whether your overall vendor risk management approach is moving in the right or wrong direction. Will the vendor’s additional Insured endorsements be enforceable? Do you know if your vendors have a condo exclusion or limitation on the liability policy? Is their contractor’s license in force?
- Does our Compliance Program offer more than just insurance certificate tracking?
There must be a cohesive vision in place to work towards in executing a winning vendor program. One approach is replacing overly vague company mission statements regarding vendor compliance with more achievable objectives, and then ask a professional vetting company to assist you in your objectives. Stagnation in executing a vendor program often stems from setting overly lofty goals at the outset, and then having Boards or operations managers not focusing on the same barometers of success over time, leaving nobody ultimately accountable or doing anything at all.
To do this there must be accountability and promotability. Companies that succeed in executing a vendor compliance program usually find ways to eliminate redundant oversight of the program. Does a single person in your company have responsibility for owning a problem or program and reporting on its progress? The more institutional overlap an organization has with multiple people or departments sharing responsibility for the execution of a vendor compliance program and reporting on its success, the less likely that program is to succeed.
- What is the end result of a poorly managed Vendor Compliance Program?
This is key. If you go to the trouble of vetting every single vendor who works on site at a one of your properties, requiring them to submit updated COIs, endorsements, etc., that means nothing if you don’t have proper written agreements in place for both the associations and your company. Vendor standards for risk compliance must be enforced, otherwise it becomes very hard to continue enforcing your company’s requirements.
The key to a comprehensive risk management program must include ensuring vendors are licensed for work performed, insured and financially stable. This is critical to minimizing potential loss. If your vendor risk management program cannot satisfy the above 3 questions, now is the time to evaluate what needs to change.
Association Services Network can help you analyze whether your Vendor Compliance program is passing or failing the above three questions.
Association Services Network is a best-of-class, easy-to-use, Asset Protection Vendor Compliance Program solution for condos, and associations. ASN provides the easiest Vendor Directory and integration capability to management software available to property managers, leasing agents, boards of directors, and back-office personnel. Quickly and easily access to whatever you need, whenever you need it. Act on the documents and vendor information at your fingertips.AT ABSOLUTELY NO COST TO YOU! Contact us today! Asn4hoa.com/cacm or 949-300-3702