Due Diligence
To remain competitive in today’s environment, organisations need to be agile and efficient. Hence, to achieve organisational business goals, sometimes collaborations and partnerships are needed, resulting in an intricate business relationships that can be full of risks.
Whether a company is seeking to invest in a promising enterprise, form a joint venture, engage a vendor, or take on a large client, organisations need to conduct due diligence. It is done to ensure that the prospective business partners possess the requisite capabilities to fulfil their commitments.
Additionally, to protect their own reputation, organisations need to ascertain if these prospective business partners have a history of poor performance or reputational issues (political or organised crime connection). Hence, due diligence is necessary to save your company from undesirable consequences, in case, if it decides to associate itself with such businesses.
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What is Due Diligence?
Due diligence is an act of performing background checks, screening and other verification on an entity to ensure that they are properly risk-assessed before any business relationship is started with them.
A new business partnership with individuals or organisations without fully knowing their past and present business dealings can expose an organisation to unpredictable risks, fines, and lawsuits.
Elements of Due Diligence
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Due diligence is performed on different entities and they are:
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