/d(y)o͞o/ /ˈdiləjəns/ :: exposing financial risks, reputational issues, criminal activity, and legal actions detrimental to your client’s personal and business stability.
This is the first in Hg’s three-part series on conducting a due diligence investigation.
Knowing all there is to know
You get a phone call from Mr. Z, president of Vitasup, a vitamin supplement manufacturing company. He informs you that he’s thinking of purchasing a competitor company and wants to know “all there is to know about “Lifesup,” a start-up company owned by CEO Jane O and Chairman of the Board Joe O.
Mr. Z’s desire to learn more has driven him to your office. But as an investigator, you know that what he’s really looking for is peace of mind before making a $2 million decision.
And that’s where your expertise in conducting due diligence investigations comes into play. You’re being hired to uncover information that will help Mr. Z feel comfortable (or not) in purchasing Lifesup.
It’s the people, not the company
Mr. Z is a smart businessman. He knows it isn’t the company that fails; it’s the people the company employs who fail. Conducting due diligence on companies or events involves investigating the people who run these entities. Your due diligence investigation will give a thorough report on Jane’s and Joe’s academic and professional backgrounds, their financial history, and any civil or criminal filings.
During your investigation, you will research online and offline resources, databases, web sites, and social media, and look for similar industry professionals [for the later interview] to give you a view of Jane and Joe and those in their respective circles—both in professional work and personal life—for nothing is off limits to the investigative eye.
Putting control in your client’s hands
At Hetherington Group, we’ve developed the Phased Approach to due diligence investigations. Phases of due diligence occur naturally when investigations are done right. Breaking the job down by investigative phases is a good way not only to help the client better understand the job but also to give the client a sense of control in budgeting and the duration of the investigation, once they’re satisfied with what you’ve found.
You can read extensively about Hg’s Phased Approach in our books Guide to Online Due Diligence Investigations and Business Background Investigation or purchase our March 2018 Webinar: Due Diligence & Public Records. Follow us on Twitter @HetheringtonGrp to catch next week’s post: “Due Diligence: Phase One of Hg’s Phased Approach.”