The Vital Importance of Corporate Due Diligence Training in a Global Economy
July 12, 2023 | by Rachel Kronenfeld
This is Part 1 of a 4-part mini-blog series.
At Hetherington Group (Hg), our investigators serve as extensions of our clients’ corporate intelligence, threat assessment, fraud, risk and compliance teams. While many functions of due diligence are outsourced to us by our diverse global enterprise clientele, we are also the key instructors training these teams to produce accurate and timely information. Our Due Diligence Training Courses enable our clients to elevate their skills on an ongoing basis to keep pace with ever-evolving methodologies and resources in open source intelligence such as public records databases, social media platforms and other online platforms. Effective due diligence can lead to mitigating risk to entities, or can elevate their business practices and trust in their brand.
Due diligence entails asking the right questions and utilizing the right resources to get thorough answers. Those resources may expand across several countries, and there may be legal and ethical boundaries that must not be crossed when obtaining this information. International due diligence is often a challenge our clients face, which can be resolved by proper due diligence training.
All companies rely upon partners they trust and also rely upon third party vendors. For instance, they need to buy from suppliers the equipment that manufactures their goods or the computers that keep their enterprise connected. When doing business in a global economy, it’s increasingly difficult to determine the ethics of suppliers and alliance partners – how does a corporation verify the identity of its key supplier half a world away and understand whether that supplier sources its product ethically, maintains appropriate working conditions for employees and invests its funds through legitimate banking operations? The answer lies in sharpened due diligence training.
At Hg, we train our clients to approach due diligence to mitigate enterprise risk. Some examples of the fraud we have helped clients overcome include:
- Vetting international networks for conflicts of interest in business relationships
- Assessing an enterprise’s global reputation to mitigate risk when engaging in international commerce
- Executives that post differing credentials in varied places on the internet to appeal to an array of audiences or who claim to have attained specific levels of education but did not graduate with the degrees specified
- Legal papers filed globally using an attorney and contact information that is fraudulent or not valid
In due diligence training, the acronym CARA analysis nicely sums up the areas of focus – Characteristics, Analysis, Reputation & Associations. Just as important in analyzing external risks is analyzing threats that can infiltrate an organization internally such as:
- Insider Threat – An employee or group of employees with nefarious intent toward the enterprise that may sabotage the work of the organization given their access to proprietary information, physical access to the premises, etc.
- Physical Threat – Mitigating risk to ensure the premises of an organization remains secure 24/7
- Network Security – Driving awareness for detection of cyber-related and information systems attacks that may cripple the organization’s processes and productivity (think attacks that start with an employee innocently opening a seemingly legitimate email)
Because such threats are possible at any time, it is imperative that corporate security officers receive ongoing due diligence training. The sophistication by which bad actors commit acts of sabotage elevates daily, but so too do the complex tools that can be implemented to combat such challenges. It may be a surprise to learn that there are presently 587 types of social media accounts and Hg instructs in the tools that can scrape all these accounts for CARA-related information.
Further, it’s not just the corporate intelligence and security officers that need to be effective in due diligence. Human resources executives and all hiring managers need to understand outside threats and how to perform investigatory due diligence on prospective employees at EVERY level of employment. It may be tempting to think that only those hires with access to confidential information such as trade secrets and other intellectual property of an enterprise pose a threat, but employees in administrative support and plant maintenance should be vetted just as thoroughly as a prospective chief technology officer.
In the corporate realm, “if you see something, say something” is sage advice. A culture of trust must be nurtured where employees feel safe if they report concerns about others inside the organization that may pose a threat to the enterprise. Periodic audits of department processes can also help uncover areas of concern and ensure the integrity of the enterprise.
By enabling corporate intelligence officers to enroll in training at least once a year and more beneficially, once a quarter, corporate enterprises will be arming themselves with the most advanced means of detecting and thwarting threats while imbuing their imbuing due diligence officers to instruct colleagues across the enterprise, in every department, to exercise optimal due diligence in their daily roles creating a more secure environment for all.
If you would like to speak with our team regarding training, please contact us at [email protected].