Partner Due Diligence

What is partner due diligence?

If your company is a player in today’s complex global business landscape, it’s critical to know who you’re dealing with. Partner due diligence should be a key component of any healthy due diligence and compliance program, with a specific focus on the third parties with whom you do business – or hope to do business with.

Partner due diligence involves conducting a thorough investigation into your vendors, suppliers, contractors, service providers, customers and any other third parties connected to your business, so you can:

  • make more informed decisions about your partnerships, based on relevant data
  • evaluate potential threats to your business
  • mitigate these risks

This process includes collecting data, substantiating and confirming the information, and assessing any warning signs or other issues your investigation uncovers.

There are a number of details that effective partner due diligence can reveal about your business associates, including:

  • whether the entity or individual is indeed real and legitimate, through background and identity checks
  • whether they have the necessary experience in your industry
  • potential conflicts of interest
  • brand and product quality
  • the entity’s or individual’s financial health
  • a history of money laundering, bribery, corruption or other legal issues

You also need to pay special attention to whether your partner or potential partner organisation:

  • operates with integrity and transparency, and enjoys a positive reputation in the market
  • maintains relationships with government officials or other politically exposed persons (PEPs)
  • makes unusual financial demands in your dealings, such as asking for anonymity of transactions, requesting an unconventional compensation structure, using non-standard payment methods or requiring advanced payment for certain transactions
  • lacks the resources to provide certain services

To protect your business from financial, reputational and regulatory risk and liability, it’s essential to be aware of such particulars before continuing or entering into a relationship with any third parties.

Nexis Diligence

When you’re ready to undertake partner due diligence to gain even further insight into those individuals and entities with whom you do business (or hope to do business), Nexis Diligence can help.

Our due diligence tool takes your investigation efforts a step further, with extensive research capabilities and robust third-party monitoring. Nexis Diligence curates all the essential information as well as the regulatory data you need in one easy-to-use solution. Arming your business with these facts, figures and codes of practice ensures that you’ll be both well-informed and continuously compliant.

At the heart of Nexis Diligence is its vast collection of international news and other informational materials. These resources include more than 150 premium business information databases; millions of public and private company profiles; and more than 26,000 current news sources. Plus, our news archive dates back 40 years, so you can take a deep dive into historical data.

You’ll also have access to PEP lists, watchlists and international sanctions lists as well as to the LexisNexis® database of international court cases and decisions.

Nexis Diligence boasts a report builder as well, which you can use to create customised documentation – complete with date and time stamps – so in the case of a regulatory audit, you can verify your ongoing compliance.

Nexis® Entity Insight

The truth is, if you don’t perform robust partner due diligence, you open up your organisation to a number of serious risks from your supply chain, vendors and other third-party partners, including:

  • reputational
  • regulatory
  • financial
  • strategic

Like Nexis Diligence, Nexis® Entity Insight is a critical component of your partner due diligence toolbox. This tool helps you continuously monitor risk from these sources, providing you with the insights and relevant information you need to safeguard your business from threats.

Nexis® Entity Insight employs a PESTLE (political, economic, socio-cultural, technological, legal and environmental) framework to detect risks earlier, giving you both the transparency and the time you need to address, mitigate and even prevent them. Additionally, the tool provides access to premium content covering individuals, entities and countries.

With the intuitive Nexis® Entity Insight dashboard, you can monitor active and pending entities and their related RSS feeds, see the volume of news for all active entity mentions (colour-coded according to PESTLE category) and pinpoint the top 10 news volume trends among active entities and risk topics. Plus, by examining the context of adverse media mentions, you can further minimise potential risks.