Effective due diligence is a crucial process that can help you make intelligent business decisions and reduces risks. It can be a difficult and time-consuming undertaking, particularly when dealing with complex transactions. A bad experience can lead to significant financial losses. JPMorgan Chase’s $175 million purchase of the startup student loan company Frank is a prime example.
Effective due diligence is required when assessing a customer or contracting with a third party service provider. This requires a substantial amount of information gathering that goes beyond the basic compliance checks. It starts with an extensive risk assessment that includes factors such as the location of the business and the industry sector. It also involves background checks that include ownership structures, as well as legal history. Also, it is a matter of assessing the regulatory compliance and anti-money laundering practices.
The more a due diligence program focuses on tasks that require judgment, the better it will be at developing this ability. It is essential to automate routine data collection so that businesses can concentrate on these judgment-intensive tasks.
The right due diligence tools can streamline the process, so that companies can save time and money, while ensuring all necessary checks are carried out. The best solutions facilitate seamless sharing monitoring and collaboration among teams and stakeholders, and include features like security settings, version control and audit trails. They also provide a secure repository to organize and store and access due diligence documents. This allows for an improved and more efficient workflow even across multiple jurisdictions.
Evolving the Corporate Development Function for Sustainable Growth
