Building a Counterparty Risk Profile Based on Consolidated Information: An Economic Security Approach

Abstract

Counterparty relationships in extended supply chains and multi jurisdictional networks increase information asymmetry, contagion effects, and integrity risks, so economic security depends on third party governance. Consolidated information is defined as an integrated dataset combining financial indicators, ownership and governance attributes, legal and compliance status, transactional behavior, and external signals such as sanctions and litigation markers. The aim of this study is to develop and empirically substantiate an economic security approach to constructing a counterparty risk profile based on consolidated information that integrates financial, legal, governance, integrity, and reputational indicators. A sequential mixed method design integrates literature synthesis, a domain based indicator system, a consolidation protocol for entity resolution and conflicting evidence, and an interpretable multi criteria scoring model. Weights and thresholds are set through expert elicitation from practitioners in economic security, compliance, procurement, and internal audit. Quantitative validation links scores to outcomes including payment delinquency, contract termination, disputes, confirmed fraud events, and adverse compliance findings. The profile functions as a governance artifact that converts consolidated evidence into contractual safeguards, monitoring cycles, and escalation triggers, reducing direct losses and secondary compliance and reputational exposures. The model foregrounds beneficial ownership transparency and critical flag logic so that unacceptable risks are not diluted by average scoring. A supporting Third Party Risk Management policy standardizes approvals, documentation, and lifecycle monitoring routines. Future work should test predictive performance across sectors, quantify the impact of beneficial ownership complexity, refine methods for reputational signal uncertainty, and assess how profile outputs shape managerial decisions and audit outcomes.