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What is a Due Diligence Check?

The due diligence process involves thoroughly identifying, evaluating and verifying all available information on a person, company or entity. A due diligence check is especially important when you’re hiring or considering prospective business partners or new commercial relationship. By conducting a comprehensive due diligence process through a reliable source, you can be more informed and confident in your company dealings.

With corruption rife on an international scale, due diligence checking with a global reach is more important than ever. To protect themselves from liabilities and regulatory non-compliance and to ensure successful, legitimate business transactions, companies must make sure they have timely and accurate business intelligence.

Due Diligence Checklist

While some companies’ checklists are too narrow or too broad, our due diligence checklist is comprehensive enough not to omit anything important, while only including the diligence due - in short, what is necessary. Our checklist will help you target the level of third-party due diligence investigation required to mitigate risk.

To start with, you can ask:

  • What countries am I doing business in, and where are my business contacts?
  • Are foreign laws relevant to me?
  • How much risk can be foreseen in doing business with the company in question?
  • Are any politically exposed persons (PEPs) involved in the commercial relationship?
  • Have I investigated any adverse reports about my potential business partner?
  • Is the business or individual currently engaged in legal issues, or have they been in the past?
  • Have I obtained information to confirm the true beneficial owners?
  • What systems can I implement to thoroughly screen potential business partners?
  • What information do I require on this third party, and where can I find it?
  • What common external and internal threats do I need to consider, before entering into this relationship?

Looking for a Due Diligence Checklist?

A due diligence checklist is designed to take companies systematically through all the information required to investigate and assess potential threats.

Ultimately, a due diligence checklist can help companies:

  • Better understand their customers, employees and vendors
  • Protect the business from reputational, financial and regulatory issues
  • Boost productivity
  • Increase profitability
  • Improve decision making

Due Diligence Checklist

Download our Due Diligence Checklist

View our guide

What Happens in the Enhanced Due Diligence Process?

There are five stages in the enhanced due diligence process:

1. Key information is provided by the prospect through a questionnaire—which is passed on to you either personally or through a third party.

2. For corporate entities: you will need to obtain official documents and contracts, as well as the company’s name, shareholders, beneficiaries, structure, associated PEPs, members of the board, and any other relevant records.

3. For individuals: the information required for review will depend on the nature of the proposed relationship.

4. For the most part, an individual will need to provide identity documents, records and sources of funds, and disclose any connection to politically exposed persons.

5. For prospective clients and third parties: you will need to cross check these entities against global sanction lists, as specified above.

Enhanced Due Diligence with LexisNexis®

LexisNexis offers powerful due diligence tools and a world leading collection of aggregated information on people, companies and countries. These solutions let you conduct enhanced global due diligence checks, take advantage of compliance monitoring services and screen individuals and companies around the world from one convenient source. Rather than going through the process of sourcing all the necessary information manually, we can take care of it all for you—all in one easy-to-use product.

Nexis Diligence™

Nexis Diligence enables you to perform comprehensive research to investigate and monitor third parties, customers and other entities with whom you do business. This simple and intuitive tool also helps you gather all the regulatory data you need to ensure your ongoing compliance. The built-in report builder allows you to produce tailored time and date stamped reports, to demonstrate your ongoing compliance efforts if you undergo a regulatory audit.

With Nexis Diligence™, you have access at your fingertips to:
  • More than 150 premium business information databases
  • Millions of public and private company profiles covering both developed and emerging markets
  • Politically exposed person (PEP) lists, international sanctions lists and watchlists
  • More than 26,000 current news sources from newspapers, blogs, and newswires, as well as an archive going back 40 years
  • The LexisNexis® database of international court cases and decisions
  • Risk analysis reports
  • More than 500 biographical sources and executive profiles

With such comprehensive documents on the people and companies you target in this process, you can minimise threats and safeguard your business; increase your knowledge in critical business decisions; and most importantly, grow your business with confidence, conduct company searches.

Nexis® Entity Insight

In today’s international marketplace, global supply chains, partners, vendors and other business relationships increase your company’s exposure to threats. If you don’t have the proper information and insights into who you’re dealing with across this complex network of third parties, your company is vulnerable to reputational, regulatory, financial and strategic threats.

Nexis® Entity Insight is a risk monitoring solution that lets you conduct ongoing risk media monitoring using a PESTLE (political, economic, socio-cultural, technological, legal and environmental) framework. This framework helps you identify supply-chain and third-party risks sooner. Entity Insight is a cost-effective, off-the-shelf tool that gives you access to premium content and enables customised risk scoring to empower your business. The tool’s risk management dashboard lets you quickly:

  • Manage active and pending entities, as well as related RSS feeds
  • Visualise news volume for all active entity mentions, colour-coded by PESTLE category
  • Identify the top 10 news volume trends among active entities and risk topics
  • Explore the context of adverse media mentions and mitigate emerging threats

Essentially, Entity Insight provides more visibility into your business risk and equips you with all the data you need to proactively make informed decisions before problems arise.

For more information on the due diligence process, check out our due diligence resources: